SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 27, 1997.
Deutsche Financial Capital Securitization LLC
(Exact name of registrant as specified in charter)
North Carolina 333-24351 56-2018645
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7800 McCloud Road, Greensboro, North Carolina 27409-9634
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (910) 664-2400
_______________________________________________________________________________
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On June 27, 1997, the Registrant caused the issuance and sale of
$161,394,769 aggregate initial principal amount of Senior/Subordinated
Pass-Through Certificates, Series 1997-I (the "Certificates") pursuant to the
Series 1997-I Pooling and Servicing Agreement, dated as of June 1, 1997 (the
"Pooling and Servicing Agreement"), among the Registrant, Oakwood Acceptance
Corporation, as Servicer, and PNC Bank, National Association, as Trustee, and
the related Standard Terms to the Pooling and Servicing Agreement (June 1997
Edition) (the "Standard Terms"). The Certificates were issued in eleven Classes
with Pass-Through Rates and initial Certificate Principal Balances as set forth
below:
Initial Certificate
Designation Pass-Through Rate Principal Balance
Class A-1....................... 6.400% $34,713,000
Class A-2....................... 6.550% $25,021,000
Class A-3....................... 6.750% $19,982,000
Class A-4....................... 6.900% $ 7,105,000
Class A-5....................... 7.100% $20,813,000
Class A-6....................... 7.375% $19,867,000
Class M......................... (1) $12,508,000
Class B-1....................... (2) $14,929,000
Class B-2....................... (3) $ 6,456,769
Class X......................... (4) (4)
Class R......................... (5) (5)
(1) The Pass-Through Rate on the Class M Certificates for any Distribution
Date shall be equal to the lesser of (i) 7.275% per annum or (ii) the
Weighted Average Net Asset Rate.
(2) The Pass-Through Rate on the Class B-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.525% per annum
or (ii) the Weighted Average Net Asset Rate.
(3) The Pass-Through Rate on the Class B-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 8.900% per annum
or (ii) the Weighted Average Net Asset Rate.
(4) The Class X Certificates have no Certificate Principal Balance and no
Pass-Through Rate.
(5) The Class R Certificates have no Certificate Principal Balance and no
Pass-Through Rate.
The Certificates evidence, in the aggregate, the entire beneficial
ownership interest in DFC Securitization Trust 1997-I (the "Trust"), which
consists primarily of a pool of Assets transferred to the Trust by the
Registrant pursuant to the Pooling and Servicing Agreement. The Assets were
purchased by the Registrant in a privately-negotiated transaction with Deutsche
Financial Capital Limited Liability Company (the "Seller") pursuant to a Sales
Agreement, dated as of June 1, 1997, between the Registrant and the Seller.
Elections will be made to treat certain assets owned by the Trust as "real
estate mortgage investment conduits" (each, a "REMIC") under the Internal
Revenue Code of 1986, as amended. The Certificates, except for the Class R
Certificates, will be designated as the "regular interests" in one of such
REMICs. The Class R Certificates will be designated as the "residual interests"
in each of the REMICs.
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The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class M and Class B-1 Certificates are collectively referred to herein as the
"Offered Certificates." The Offered Certificates are senior to the Class B-2,
Class X and Class R Certificates. The Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5 and Class A-6 Certificates are senior to the Class M, Class B-1
and Class B-2 Certificates.
The Offered Certificates have been sold by the Registrant to Credit
Suisse First Boston Corporation and Deutsche Morgan Grenfell Inc. (the
"Underwriters") pursuant to a Terms Agreement, dated as of June 20, 1997, among
the Underwriters, the Registrant and the Seller, which incorporates by reference
the Registrant's Underwriting Agreement Standard Provisions, June 1997. A 50%
interest in each of the Class B-2, Class X and Class R Certificates has been
transferred to each of DFC Residual Corp., a Nevada corporation and to Oakwood
Financial Corporation, a Nevada corporation, respectively.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement or, if not defined in
the Pooling and Servicing Agreement, the meanings assigned to them in the
Standard Terms.
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Exhibits
1.1 Underwriting Agreement Standard Provisions (June 1997),
together with Form of Underwriting Agreement.
1.2 Terms Agreement, dated June 20, 1997, among the Registrant,
Deutsche Financial Capital Limited Liability Company, Credit
Suisse First Boston Corporation and Deutsche Morgan Grenfell
Inc., as Underwriters, relating to the Offered Certificates.
4.1 Standard Terms to Pooling and Servicing Agreement (June 1997
Edition).
4.2 Copy of the Series 1997-I Pooling and Servicing Agreement,
dated as of June 1, 1997, by and among the Registrant, Oakwood
Acceptance Corporation, as Servicer, and PNC Bank, National
Association, as Trustee. (related exhibits available upon
request of the Trustee)
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
June 27, 1997 DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
By: DEUTSCHE FINANCIAL
CAPITAL I CORP.
By: /s/ Doug R. Muir
---------------------
Name: Doug R. Muir
Title: Treasurer, Assistant Secretary
Vice President
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INDEX TO EXHIBITS
Page
1.1 Underwriting Agreement Standard Provisions
(June 1997), together with Form of
Underwriting Agreement................................................
1.2 Terms Agreement, dated June 20, 1997,
among the Registrant, Deutsche Financial
Capital Limited Liability Company, Credit
Suisse First Boston Corporation, and
Deutsche Morgan Grenfell Inc., as Underwriters,
relating to the Offered Certificates..................................
4.1 Standard Terms to Pooling and Servicing
Agreement (June 1997 Edition).........................................
4.2 Copy of the Series 1997-I Pooling and
Servicing Agreement, dated as of
June 1, 1997, by and among the Registrant,
Oakwood Acceptance Corporation, as Servicer,
and PNC Bank, National Association (related
exhibits available upon request of the Trustee).......................
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DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
____________________
Pass-Through Certificates
(Issuable in Series)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
____________________
June 1997
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Deutsche Financial Capital Securitization LLC, a North Carolina limited
liability company (the "Company"), proposes to sell Pass-Through Certificates
("Certificates") in various series (each a "Series"), in one or more offerings
on terms to be determined at the time of sale, each to be issued by a separate
trust (a "Trust") under a pooling and servicing agreement for such Series that
incorporates by reference standard terms (such agreement collectively with such
standard terms, the "Pooling and Servicing Agreement"), among the Company,
Oakwood Acceptance Corporation, a North Carolina corporation, as Servicer (the
"Servicer"), and the trustee named therein (the "Trustee"). The certificates of
each Series (the "Certificates") will represent in the aggregate the entire
beneficial ownership interest in a segregated pool of manufactured housing
installment sales contracts ("Contracts") secured by units of manufactured
housing ("Manufactured Homes") and/or mortgage loans ("Mortgage Loans" and,
collectively with Contracts, "Assets") secured by first liens on real estate to
which the related Manufactured Homes are deemed permanently affixed ("Mortgaged
Properties").
The Trustee may make one or more elections to have Trust Assets or
portions thereof treated as real estate mortgage investment conduits (each, a
"REMIC") under the Internal Revenue Code of 1986, as amended (the "Code"). In
the event that more than one REMIC is created for a Series, all references
herein to a REMIC shall be deemed to refer to all related REMICs, unless the
context otherwise requires.
The Company will sell, assign and transfer the Assets acquired by it to
the related Trust, all in exchange for the Certificates of the related Series
issued by that Trust. The Assets will have been acquired by the Company from
Deutsche Financial Capital Limited Liability Company, a North Carolina limited
liability company ("DFC") or from one or more unaffiliated sellers (each, in
such capacity, a "Seller"), in each case pursuant to a sales agreement (each, a
"Sales Agreement") between the Company and the Seller of such Assets. The net
proceeds to the Company from the sale of each Series of the Certificates
principally will be used to pay the purchase price of the Assets acquired for
the related Trust.
The Certificates are more fully described in the Registration Statement
(as hereinafter defined). Each Series of Certificates, and any classes of
Certificates within each Series, may vary, among other things, as to number and
types of classes, aggregate principal amount, final stated distribution dates,
the rate or rates of interest accruing thereon, and the allocation, priority and
timing of distributions thereon.
From time to time, the Company may enter into one or more terms
agreements (each, a "Terms Agreement") substantially in the form of the Form of
Terms Agreement attached hereto as Exhibit A, which Terms Agreements provide for
the sale of all or a portion of certain classes of a Series of Certificates
(such certificates to be so purchased being herein collectively referred to as
the "Underwritten Certificates") to the underwriters named in the related
underwriting agreement (the "Underwriters"). The standard provisions set forth
herein are to be incorporated by reference in any such Terms Agreement. A Terms
Agreement, including the provisions hereof incorporated therein by reference, is
herein referred to as an "Underwriting Agreement" or an "Agreement." Unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings assigned to them in the Terms Agreement into which the standard
provisions are incorporated and if not defined therein shall have the meanings
assigned to them in the related Pooling and Servicing Agreement.
The Terms Agreement relating to each offering of Underwritten
Certificates shall specify, among other things, the principal amount of the
Underwritten Certificates to be issued and their terms not otherwise specified
in the related Pooling and Servicing Agreement, the price or prices at which the
Underwritten Certificates are to be purchased by the Underwriters from the
Company, the initial public offering price or the method by which the price at
which such Underwritten Certificates are to be sold will be determined, the
names of the firms, if any, designated as representatives of the Underwriters
(the "Representatives"), and the principal amount of the Underwritten
Certificates to be purchased by
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each Underwriter, and shall set forth the date, time and manner of delivery of
the Underwritten Certificates and payment therefor.
The Company is a limited-purpose limited liability company whose
members are Deutsche Financial Capital I Corp. (the "Manager"), a North Carolina
corporation, and DFC. Each of the Manager and DFC are owned in equal shares by
Deutsche Financial Services Corporation, a Nevada corporation, and OAC. Deutsche
Financial Services Corporation is an indirect wholly-owned subsidiary of
Deutsche Bank AG, and OAC is a wholly-owned subsidiary of Oakwood Homes
Corporation, a North Carolina corporation.
1. Representations and Warranties. (a) The Company and DFC represent
and warrant to, and agree with, each Underwriter that:
i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 for
the registration of the Underwritten Certificates under the Securities
Act of 1933, as amended (the "Act"), which registration statement has
become effective, and has filed such amendments thereto as may have
been required to the date hereof. Such registration statement, as
amended at the date hereof, meets the requirements set forth in Rule
415 under the Act and complies in all other material respects with the
Act and the rules and regulations thereunder. The Company proposes to
file with the Commission pursuant to Rule 424 under the Act a
supplement to the form of prospectus included in such registration
statement relating to the Underwritten Certificates and the plan of
distribution thereof. Such registration statement, including the
exhibits thereto, as amended at the date hereof, is hereinafter called
the "Registration Statement;" the latter of such prospectus in the form
in which it appears in the Registration Statement or in the form most
recently revised and filed with the Commission pursuant to Rule 424 is
hereinafter called the "Basic Prospectus;" and the form of prospectus
supplement specifically relating to the Underwritten Certificates, in
the form in which it shall be first filed with the Commission pursuant
to Rule 424 (including the Basic Prospectus as so supplemented and the
information, if any, filed with the Commission pursuant to the Exchange
Act and incorporated by reference therein) is hereinafter called the
"Final Prospectus." Any preliminary form of the Final Prospectus which
has heretofore been filed pursuant to Rule 424 or, prior to the
effective date of the Registration Statement, pursuant to Rule 402(a),
424(a) or 430A, is hereinafter called a "Preliminary Final Prospectus."
Any supplement to the Basic Prospectus specifically relating to the
Underwritten Certificates shall be referred to by itself as the
"Prospectus Supplement."
(ii) As of the date of this Agreement, when the Final
Prospectus is first filed pursuant to Rule 424 under the Act, when,
prior to the Closing Date (as hereinafter defined), any amendment to
the Registration Statement becomes effective, when any supplement to
the Final Prospectus is filed with the Commission, and at the Closing
Date, (A) the Registration Statement, as amended as of any such time,
and the Final Prospectus, as amended or supplemented as of any such
time, complies and will comply in all material respects with the
applicable requirements of the Act and the rules and regulations
thereunder and (B) the Registration Statement, as amended as of any
such time, does not contain and will not contain any untrue statement
of a material fact and does not omit and will not omit to state any
material fact required to be stated therein or necessary in order to
make the statements made therein not misleading and the Final
Prospectus, as amended or supplemented as of any such time, does not
and will not include an untrue statement of a material fact and does
not omit and will not omit to state a material fact necessary in order
to make the statements made therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted
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from the Registration Statement or the Final Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Underwriter specifically for use in connection with
the preparation of the Registration Statement and the Final Prospectus.
(iii) As of the date of this Agreement, when the Final
Prospectus is first filed pursuant to Rule 424 under the Act, when,
prior to the Closing Date, any amendment to the Registration Statement
becomes effective, when any supplement to the Final Prospectus is filed
with the Commission, and at the Closing Date, there has not and will
not have been (A) any request by the Commission for any further
amendment of the Registration Statement or the Final Prospectus or for
any additional information, (B) any issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the initiation or threat of any proceeding for that purpose, or (C)
any notification with respect to the suspension of the qualification of
the Underwritten Certificates for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(iv) The Company has been duly organized and is validly
existing as a limited liability company under the laws of the State of
North Carolina with full legal power and authority (corporate and
other) to own its properties and to conduct its business as it is now
conducted and as described in the Final Prospectus, and to enter into
and perform its obligations under the Agreement, each related Sales
Agreement and the related Pooling and Servicing Agreement, and has
qualified to do business under the laws of each jurisdiction that
requires such qualification wherein it owns or leases material
properties, except where the failure so to qualify would not have a
material adverse effect on the Company. The Company holds all material
licenses, certificates, franchises, and permits from all governmental
authorities necessary for the conduct of its business as it is now
conducted and as described in the Final Prospectus, and has received no
notice of proceedings relating to the revocation of any such license,
certificate or permit, that, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would affect materially
and adversely the conduct of the business, results of operations, net
worth or condition (financial or otherwise) of the Company.
(v) The execution of the Terms Agreement, each related Sales
Agreement and the related Pooling and Servicing Agreement are within
the power of the Company. The Agreement has been and as of the Closing
Date the related Pooling and Servicing Agreement and each related Sales
Agreement will have been, duly and validly authorized, executed and
delivered by the Company, and assuming the valid authorization,
execution and delivery by the other parties thereto, each constitutes,
or will constitute, a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is sought
in a proceeding in equity or at law, and except that with respect to
the Agreement the provisions relating to indemnification of the
Underwriters may be unenforceable as against public policy.
(vi) Neither the issuance and sale of the Underwritten
Certificates, nor the execution and delivery by the Company of this
Agreement, any related Sales Agreement or the related Pooling and
Servicing Agreement, nor the consummation by the Company of any of the
transactions herein or therein contemplated, nor compliance by the
Company with the provisions hereof or thereof, will (A) conflict with
or result in a breach of, or constitute a default under, any of the
provisions of the articles of organization or operating agreement of
the Company or any law, governmental rule or regulation or any
judgment, decree or order binding
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on the Company or any of its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to
which the Company is a party or by which it is bound, or (B) result in
the creation or imposition of any lien, charge, or encumbrance upon any
of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument.
(vii) No filing or registration with, notice to, qualification
of or with, or consent, approval, authorization or order or other
action of any person, corporation or other organization or of any
court, supervisory or governmental authority or agency is required for
the consummation by the Company of the transactions contemplated by
this Agreement or the related Pooling and Servicing Agreement except
such as have been, or will have been prior to the Closing Date,
obtained under the Act, or state securities laws or "Blue Sky" laws, or
from the National Association of Securities Dealers, Inc. in connection
with the purchase and distribution of the Underwritten Certificates by
the Underwriters, or any recordations of the assignment of the related
Mortgage Loans to the Trustee pursuant to the related Pooling and
Servicing Agreement that have not yet been completed.
(viii) There are no actions, suits or proceedings against, or
investigations of, the Company pending, or, to the knowledge of the
Company, threatened, before any court, administrative agency or other
tribunal (A) asserting the invalidity of this Agreement, the related
Pooling and Servicing Agreement, any related Sales Agreement or the
Certificates of the related Series, (B) seeking to prevent the issuance
of the Certificates of the related Series or the consummation of any of
the transactions contemplated by the Agreement, any related Sales
Agreement or the related Pooling and Servicing Agreement, (C) which
might materially and adversely affect the business, operations,
financial condition (including, if applicable, on a consolidated
basis), properties or assets of the Company, performance by the Company
of its obligations under, or the validity or enforceability of, the
Agreement, the related Pooling and Servicing Agreement, any related
Sales Agreement, or the validity or enforceability of the Certificates
of the related Series or (D) seeking to affect adversely the federal or
state income tax attributes of the Underwritten Certificates as
described in the Final Prospectus.
(ix) Since the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, there has
not been any material adverse change or development involving a
prospective material adverse change in the business, operations,
financial condition, properties or assets of the Company.
(x) The Underwritten Certificates and Pooling and Servicing
Agreement will conform in all material respects to the descriptions
thereof contained in the Final Prospectus, and the Underwritten
Certificates, when duly and validly executed and authenticated by the
Trustee and delivered to and paid for by the Underwriters as provided
herein, will be validly issued and entitled to the benefits of the
related Pooling and Servicing Agreement, and will be binding
obligations of the Trust to the extent provided in the related Pooling
and Servicing Agreement.
(xi) At the time of execution of the related Pooling and
Servicing Agreement, the Company will own the Assets being transferred
to the Trustee pursuant to the related Pooling and Servicing Agreement,
free and clear of any lien, adverse claim, mortgage, charge, pledge or
other encumbrance or security interest, and will not have assigned to
any other person any of its right, title or interest in such Assets,
and, upon the execution of the related Pooling and Servicing Agreement,
the Company will have transferred all its right, title and interest in
such Assets to the Trustee, provided that the Company will not be
deemed to be in breach of this
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representation and warranty to the extent that a court of competent
jurisdiction holds that at the time of the execution of the related
Pooling and Servicing Agreement the Company had a first priority
perfected security interest in such Assets or that the Company granted
to the Trust a first priority perfected security interest in such
Assets.
(xii) Under generally accepted accounting principles, the
Company will report its transfer of the Assets to the Trustee pursuant
to the related Pooling and Servicing Agreement and the sale of the
Certificates of the related Series as a sale of its interest in such
Assets. The Company has been advised by its independent certified
public accountants that it concurs with such treatment under generally
accepted accounting principles. For federal income tax purposes, the
Company will treat the transfer of the Assets to the Trustee and the
sale of the Underwritten Certificates either as a transaction in which
it acts as the agent of one or more Sellers or as a sale of its
interest in the Assets.
(xiii) As of the Closing Date, the Assets will be duly and
validly assigned to the Trustee or its nominee, UCC-1 financing
statements describing any Contracts as collateral and (i) naming the
Seller as "debtor," the Company as "secured party" and the Trustee as
"assignee" and (ii) naming the Company as "debtor" and the Trustee as
"secured party," will be filed in all filing offices where such filing
is necessary to perfect the Trustee's ownership or security interest in
any related Contracts, and any related Mortgage Notes will be endorsed
without recourse to the Trustee or to its nominee and delivered to the
Trustee or to an agent on its behalf and, where required in order to
transfer all right, title and interest to a Mortgage Loan. Upon
completion of the aforementioned actions, upon the stamping of the face
of each related Contract with a legend giving notice of the assignment
of such Contract to the Trustee, and, where required in order to
transfer a lien on a Mortgaged Property, upon the recordation of
assignments to the Trustee of any related Mortgages in the public
records in which such Mortgages shall have been recorded (which
recordation shall be effected unless the Underwriters receive an
opinion of counsel satisfactory to them (at the Company's expense) that
such recording is not required under applicable law to perfect the
Trustee's security interest in the related Mortgaged Property), the
Trustee will own each related Asset, subject to no prior lien,
mortgage, security interest, pledge, charge or other encumbrance,
except as permitted under the related Pooling and Servicing Agreement;
provided that the Company will not be deemed to be in breach of this
representation and warranty as to any Asset to the extent that a court
of competent jurisdiction holds that the Trustee has a first priority
perfected security interest in such Asset or that the Company assigned
to the Trust a first priority perfected security interest in such
Asset.
(xiv) As of the Closing Date, any letter of credit or surety
bond included in any accounts or funds constituting part of the Trust
with respect to the Underwritten Certificates will name the Trustee as
the beneficiary thereof and will be delivered to the Trustee, any cash
will be delivered to the Trustee and any Eligible Investments (as
defined in the related Pooling and Servicing Agreement) will be made in
the Trustee's name, and delivered to and/or assigned to the Trustee,
and the Trustee either will own such assets, or have a first priority
perfected security interest therein, in either case subject to no prior
lien, security interest, pledge, charge or other encumbrance.
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(xv) Each Seller has been duly incorporated or otherwise
formed and is validly existing and duly qualified under the laws of the
jurisdiction of its incorporation or formation and each jurisdiction
that requires such qualification wherein it owns or leases any material
properties (except where the failure so to qualify would not have a
material adverse effect on such Seller).
(xvi) At the time of the execution and delivery of a Sales
Agreement by each Seller, such execution and delivery by such Seller
will be within the legal power of such Seller and will have been duly
authorized by all necessary action on the part of such Seller; and
neither the execution and delivery of such Sales Agreement by such
Seller, nor the consummation by such Seller of the transactions therein
contemplated, nor compliance with the provisions thereof by such
Seller, will (A) conflict with or result in a breach of, or constitute
a default under, any of the provisions of the articles of
incorporation, by-laws, partnership agreement or other organizational
documents of such Seller, or any law, governmental rule or regulation,
or any judgment, decree or order binding on such Seller or any of its
properties, or any of the provisions of any indenture, mortgage, deed
of trust, contract or other instrument to which such Seller is a party
or by which it is bound, or (B) result in the creation or imposition of
any lien, charge or encumbrance upon any of its properties pursuant to
the terms of any such indenture, mortgage, deed of trust, contract or
other instrument.
(xvii) Each related Sales Agreement, when executed and
delivered as contemplated thereby, will have been duly executed and
delivered by the Seller that is a party thereto, and each will
constitute, when so executed and delivered, a legal, valid and binding
agreement, enforceable against such Seller in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is sought
in a proceeding in equity or at law, and except that the provisions of
indemnity contained therein may be unenforceable as against public
policy.
(xviii) Under generally accepted accounting principles, each
Seller will report its transfer of the Assets pursuant to its Sales
Agreement as a sale of its interest in such Assets. Each Seller has
been advised by its independent certified public accountants that they
concur with such treatment under generally accepted accounting
principles and, if applicable, regulatory accounting principles. Each
Seller also will so report the transfer in all financial statements and
reports to the regulatory and supervisory agencies and authorities to
which it reports, if any. For federal income tax purposes, each Seller
will treat the transfer of the Assets pursuant to the related Sales
Agreement as a sale of the interest in the Assets represented by the
Certificates of the related Series not held by such Seller and as an
exchange of the remaining interest in the Assets for any Certificates
of such Series retained by such Seller.
(xix) At the Closing Date, each Contract, Mortgage Note and
Mortgage will constitute a legal, valid and binding instrument,
enforceable against the related Obligor in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally, and to general
principles of equity (whether considered in a proceeding at law or in
equity), and will meet the criteria for selection described in the
Final Prospectus.
(xx) At the Closing Date, any Primary Mortgage Insurance
Policies and Standard Hazard Insurance Policies (as such terms are
defined in the related Pooling and Servicing Agreement) that are
required to be maintained with respect to any of the related Assets
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pursuant to the related Pooling and Servicing Agreement will have been
duly and validly authorized, executed and delivered by, and will
constitute legal, valid and binding obligations of the issuers of such
Primary Mortgage Insurance Policies and Standard Hazard Insurance
Policies (collectively, the "Insurers"), as the case may be, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and to general principles of
equity, regardless of whether enforcement is sought in a proceeding in
equity or at law.
(xxi) Each Contract and Mortgage Loan was originated by an
entity that met the mortgagee criteria specified in Section 3(a)(41) of
the Securities Exchange Act of 1934 (the "Exchange Act") for the
related Certificates to constitute "mortgage related securities"
(assuming all other requirements of such Section 3(a)(41) are also met
in respect of such Certificate for such Certificates to be "mortgage
related securities" as so defined) at the time of origination of such
Contract or Mortgage Loan.
(xxii) Each of the Underwritten Certificates, when issued,
will constitute a "mortgage related security" as such term is defined
in Section 3(a)(41) of the Exchange Act for so long as such Certificate
is rated in one of the two highest rating categories by a nationally
recognized statistical rating organization.
(xxiii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement
and the related Pooling and Servicing Agreement and the execution,
delivery and sale of the Underwritten Certificates have been or will be
paid at or prior to the Closing Date.
(xxiv) Neither the Company nor the Trust is, and the issuance
and sale of the Underwritten Certificates in the manner contemplated
by the Final Prospectus will not cause the Company or the Trust to
become, subject to registration or regulation as an "investment
company" or an affiliate of an "investment company" under (and as
defined in) the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(xxv) Immediately prior to the delivery of the Underwritten
Certificates to the Underwriters, the Company will own the Underwritten
Certificates free and clear of any lien, adverse claim, pledge,
encumbrance or other security interest, and will not have assigned to
any person any of its right, title or interest in the Underwritten
Certificates, and, upon consummation of the transactions contemplated
in this Agreement, the Company will have transferred all its right,
title and interest in the Underwritten Certificates to the
Underwriters.
(xxvi) At the Closing Date, the representations and warranties
made by the Company in the related Pooling and Servicing Agreement will
be true and correct in all material respects.
(b) DFC further represents and warrants to, and agrees with, each
Underwriter that:
(i) DFC has been duly organized and is validly existing as a
limited liability company under the laws of the State of North Carolina
with full legal power and authority to own its properties and conduct
its business as it is now conducted by DFC, and has qualified to do
business and is in good standing under the laws of each jurisdiction
which requires such qualification wherein it owns or leases material
properties except when the failure to so qualify would not have a
material adverse effect on DFC.
(ii) The execution of the Agreement and the related Sales
Agreement are within the power of DFC. This Agreement has been, and as
of the Closing Date the related Sales
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Agreement will have been, duly and validly authorized, executed and
delivered by DFC, and assuming the valid authorization, execution and
delivery of each such agreement by the other parties thereto, each of
such agreements constitutes a legal, valid and binding obligation of
DFC, enforceable against DFC in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is sought in a
proceeding in equity or at law, and except that the provisions relating
to indemnification of the Underwriters may be unenforceable as against
public policy.
(iii) Neither the issuance and sale of the Underwritten
Certificates, nor the execution and delivery by DFC of this Agreement
or any related Sales Agreement, nor the consummation by DFC of any of
the transactions herein or therein contemplated, nor compliance by DFC
with the provisions hereof or thereof, will (A) conflict with or result
in a breach of, or constitute a default under, any of the provisions of
the articles of organization or operating agreement of DFC or any law,
governmental rule or regulation or any judgment, decree or order
binding on DFC or any of its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to
which DFC is a party or by which it is bound, or (B) result in the
creation of any lien, charge, or encumbrance upon any of its properties
pursuant to the terms of any such indenture, mortgage, deed of trust,
contract or other instrument.
(iv) There are no actions, suits or proceedings against, or
investigations of, DFC pending, or, to the knowledge of DFC,
threatened, before any court, administrative agency or other tribunal
(i) asserting the invalidity of this Agreement or any related Sales
Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any related Sales
Agreement, (iii) which might materially and adversely affect the
business, operations, financial condition (including, if applicable, on
a consolidated basis), properties or assets of DFC, performance by DFC
of its obligations under, or the validity or enforceability of, this
Agreement or any related Sales Agreement or (iv) seeking to affect
adversely the federal or state income tax attributes of the
Underwritten Certificates as described in the Final Prospectus.
(v) No filing or registration with, notice to, qualification
of or with, or consent, approval, authorization or order or other
action of any person, corporation or other organization or of any
court, supervisory or governmental authority or agency is required for
the consummation by DFC of the transactions contemplated by this
Agreement except such as have been, or will have been prior to the
Closing Date, obtained under the Act, or state securities laws or "Blue
Sky" laws, or from the National Association of Securities Dealers, Inc.
in connection with the purchase and distribution of the Underwritten
Certificates by the Underwriters, or any recordations of the assignment
of the related Mortgage Loans to the Trustee pursuant to the related
Pooling and Servicing Agreement that have not yet been completed.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the applicable purchase prices set
forth in the related Terms Agreement (plus accrued interest as therein set
forth), Underwritten Certificates representing the respective aggregate
approximate principal amounts, notional amounts or percentage interests, as the
case may be, of the various classes of Underwritten Certificates set forth in
the Terms Agreement or opposite such Underwriter's name in an attachment to the
Terms Agreement.
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<PAGE>
3. Delivery and Payment. Delivery of and payment for the Underwritten
Certificates shall be made at the office, on the date and at the time specified
in the related Terms Agreement, which date and time may be postponed by
agreement between the Underwriters and the Company or as provided in Section 10
hereof (such date and time of delivery and payment for the Underwritten
Certificates being herein called the "Closing Date"). Delivery of the
Underwritten Certificates shall be made to the Underwriters against payment by
the Underwriters of the purchase price thereof to or upon the order of the
Company in the type of funds specified in the Terms Agreement. The Underwritten
Certificates shall be registered in such names and in such authorized
denominations as the Underwriters may request in writing not less than two full
business days in advance of the Closing Date.
The Company agrees to have the Underwritten Certificates available for
inspection, checking and packaging by the Underwriters in New York, New York (or
such other location within the continental United States requested by the
Underwriters), not later than 1:00 p.m. on the business day prior to the Closing
Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Underwritten Certificates of such Series for
sale to the public as set forth in the related Final Prospectus.
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<PAGE>
5. Agreements. (a) The Company covenants and agrees with the several
Underwriters that:
(i) Substantially contemporaneously with the execution of a
terms agreement, the Company will prepare the supplement to the Basic
Prospectus setting forth the principal amount of Underwritten
Certificates covered thereby and the material terms thereof, the
initial public offering price of the Underwritten Certificates or the
manner of offering such Underwritten Certificates, the price at which
the Underwritten Certificates are to be purchased by the Underwriters
from the Company, the selling concessions and reallowance, if any, and
such other information as the Underwriters and the Company deem
appropriate in connection with the offering of such Underwritten
Certificates. The Company will not file any amendment or supplement to
the Final Prospectus relating to the Underwritten Certificates unless
the Company has furnished the Underwriters a copy for their review
prior to filing and will not file any such proposed amendment or
supplement to which the Underwriters reasonably object. Subject to the
foregoing sentence, the Company will cause the Final Prospectus to be
filed with the Commission pursuant to Rule 424 under the Act and a
report on Form 8-K will be filed with the Commission within 15 days
following the Closing setting forth specific information concerning the
Underwritten Certificates and the related Assets and including, as an
exhibit, a copy of the related Pooling and Servicing Agreement. In
addition, to the extent that any Underwriter (i) has provided
Collateral Term Sheets to the Company that such Underwriter has
provided to a prospective investor, the Company has filed such
Collateral Term Sheets as an Exhibit to Form 8-K within two business
days of its receipt thereof, (ii) has provided Structural Term Sheets
or Computational Materials to the Company that such Underwriter has
provided to a prospective investor, the Company will file or cause to
be filed with the Commission a report on Form 8-K containing such
Structural Term Sheets and Computational Materials, as soon as
reasonably practicable after the date of the Underwriting Agreement,
but in any event, not later than the date on which the Final Prospectus
is filed with the Commission pursuant to Rule 424 under the Act, or
(iii) has provided Series Term Sheets to the Company that such
Underwriter has provided to a prospective investor, the Company has
filed such Series Term Sheets as an Exhibit to Form 8-K within two
business days of its receipt thereof. The Company will promptly advise
the Underwriters (A) when the Final Prospectus shall have been filed
with the Commission pursuant to Rule 424 and the Form 8-K shall have
been filed with the Commission, (B) when any amendment to the
Registration Statement shall have become effective, (C) of any request
by the Commission for any amendment of the Registration Statement or
the Final Prospectus or for any additional information, (D) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose, and (E) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Underwritten Certificates for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or suspension and, if issued, to obtain
the withdrawal thereof as soon as possible.
(ii) If, at any time when a prospectus relating to the
Underwritten Certificates is required to be delivered under the Act,
any event occurs as a result of which, in the opinion of counsel to the
Company or the Underwriters, the Final Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading, or if it shall be necessary to amend or supplement the
Final Prospectus to comply with the Act or the rules and regulations
thereunder, the
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<PAGE>
Company will promptly prepare and file with the Commission, subject to
paragraph (i) of this Section 5, an amendment or supplement that will
correct such statement or omission or an amendment that will effect
such compliance and, if such amendment or supplement is required to be
contained in a post-effective amendment of the Registration Statement,
will use its best efforts to cause such amendment of the Registration
Statement to be made effective as soon as possible and will promptly
file all reports and any definitive proxy or information statements
required to be filed by the Company pursuant to Sections 13, 14 and 15
of the Exchange Act subsequent to the date of the Prospectus for so
long as the delivery of a Prospectus is required in connection with the
offering or sale of the Underwritten Certificates; provided, however,
that any such amendment or update prepared more than nine months after
the Closing Date shall be at the expense of the Underwriters.
(iii) The Company will furnish to counsel for the
Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and each amendment thereto which
shall become effective on or prior to the Closing Date, and to each
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and each such amendment and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of any Preliminary Final Prospectus and the Final
Prospectus and any amendments thereof and supplements thereto as the
Underwriters may reasonably request.
(iv) The Company will apply the net proceeds from the sale of
the Underwritten Certificates in the manner set forth in the related
Final Prospectus.
(v) The Company or DFC will pay or cause to be paid all the
fees and disbursements of the Company's counsel and of independent
accountants for the Company relating to legal review, opinions of
counsel for the Company, audits, review of unaudited financial
statements, cold comfort review or otherwise; the costs and expenses of
printing (or otherwise reproducing) and delivering the Agreement, the
related Pooling and Servicing Agreement and the Underwritten
Certificates; the initial fees, costs and expenses of or relating to
the Trustee under the related Pooling and Servicing Agreement and its
counsel; the initial fees, costs and expenses of or relating to any
custodian of the Contracts or Mortgage Loans under a custodial
agreement and such custodian's counsel; the costs and expenses incident
to the preparation, printing, distribution and filing of the
Registration Statement (including exhibits thereto), the Basic
Prospectus, the Preliminary Final Prospectus and the Final Prospectus,
and all amendments of and supplements to the foregoing, and of the
Underwritten Certificates; and the fees of rating agencies. Except as
provided in Section 7 hereof, the Underwriters shall be responsible for
paying all costs and expenses incurred by them in connection with their
purchase and sale of the Underwritten Certificates.
(vi) The Company will use its best efforts to arrange for the
qualification of the Underwritten Certificates for sale under the laws
of such jurisdictions as the Underwriter may designate in the Terms
Agreement, to maintain such qualifications in effect so long as
required for the distribution of the Underwritten Certificates and to
arrange for the determination of the legality of the Underwritten
Certificates for purchase by investors; provided, however, that the
Company shall not be required to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
which would subject it to general or unlimited service of process in
any jurisdiction where it is not now so subject, and provided further,
that the Underwriter shall pay all costs and expenses associated
therewith.
(vii) So long as any Underwritten Certificates are
outstanding, the Company will
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<PAGE>
cause the related Servicer or Trustee to furnish to the Underwriter, as
soon as available, a copy of (A) the annual statement of compliance
delivered by the Servicer to the Trustee under the related Pooling and
Servicing Agreement, (B) the annual independent public accountants'
servicing report furnished to the Trustee pursuant to the related
Pooling and Servicing Agreement, (C) each report, statement or other
document regarding the Underwritten Certificates filed with the
Commission under the Exchange Act or mailed to the holders of the
Underwritten Certificates, pursuant to the related Pooling and
Servicing Agreement or otherwise, (D) any reports provided by certified
public accountants pursuant to the related Pooling and Servicing
Agreement regarding the reports, statements or other documents included
in clause (C) above, and (E) from time to time, such other information
concerning the Underwritten Certificates as the Underwriter may
reasonably request and which may be furnished by the Company or the
Servicer without undue expense. In addition, the Company shall make or
cause the Trustee to make generally available to the holders of the
Underwritten Certificates as soon as practicable, but in any event not
later than sixteen months from the date of this Agreement, an earnings
statement of the issuer of the Underwritten Certificates (which need
not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission (including at the option of the
Company, Rule 158).
(vii) Without the consent of the Underwriters, the Company
will not waive any of the conditions to its obligations to purchase the
Assets pursuant to the related Sales Agreement.
(ix) If a REMIC election is to be made with respect to some or
all of the related Assets ("REMIC Assets"), the Company will make or
cause to be made all filings necessary to establish and maintain the
status of such REMIC Assets as a REMIC.
(b) Each Underwriter represents, warrants, covenants and agrees with
the Company and DFC that:
(i) It either (A) has not provided any potential investor with
a Collateral Term Sheet (that is required to be filed with the
Commission within two business days of first use under the terms of the
Public Securities Association Letter as described below), or (B) has,
substantially contemporaneously with its first delivery of such
Collateral Term Sheet to a potential investor, delivered such
Collateral Term Sheet to the Company, which Collateral Term Sheet, if
any, is attached to the Underwriting Agreement as Exhibit A.
(ii) It either (A) has not provided any potential investor
with a Structural Term Sheet, Series Term Sheets or Computational
Materials, or (B) has promptly provided any such Structural Term Sheet,
Series Term Sheets or Computational Materials to the Company, which
Structural Term Sheets, Series Term Sheets and Computational Materials,
if any, are attached to the Underwriting Agreement as Exhibit B.
(iii) Each Collateral Term Sheet bears a legend indicating
that the information contained therein will be superseded by the
description of the collateral contained in the Prospectus Supplement
and, except in the case of the initial Collateral Term Sheet, that such
information supersedes the information in all prior Collateral Term
Sheets.
(iv) Each Structural Term Sheet, Series Term Sheet and all
Computational Materials bear a legend substantially as follows (or in
such other form as may be agreed prior to the date of the Underwriting
Agreement):
This information does not constitute either an offer to sell
or a solicitation of an
-13-
<PAGE>
offer to buy any of the securities referred to herein. Information
contained herein is confidential and provided for information only,
does not purport to be complete and should not be relied upon in
connection with any decision to purchase the securities. This
information supersedes any prior versions hereof and will be
deemed to be superseded by any subsequent versions including, with
respect to any description of the securities or the underlying assets,
the information contained in the final Prospectus and accompanying
Prospectus Supplement. Offers to sell and solicitations of offers to
buy the securities are made only by the final Prospectus and the
related Prospectus Supplement.
(v) It (at its own expense) agrees to provide to the Company
any accountants' letters obtained relating to the Collateral Term
Sheets, Structural Term Sheets, Series Term Sheets and Computational
Materials, which accountants' letters shall be addressed to the
Company.
(vi) It has not, and will not, without the prior written
consent of the Company, provide any Collateral Term Sheets, Structural
Term Sheets, Series Term Sheets or Computational Materials to any
investor after the date of the Agreement.
(vii) Any Series Term Sheets, Collateral Term Sheet,
Structural Term Sheet, Series Term Sheet or Computational Materials do
not contain any untrue statement of a material fact and do not omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except to the extent that any
such misstatement or omission results from an Asset Pool Error (as
defined in Section 8(a)(i) below).
For purposes of this Agreement, Series Term Sheets, Collateral Term
Sheets and Structural Term Sheets shall have the respective meanings assigned to
them (a) in the case of Series Term Sheets, in the no-action letter addressed to
Greenwood Trust Company, Discover Card Master Trust I dated April 5, 1996, and
(b) in the case of Collateral Term Sheets and Structural Term Sheets, in the
February 13, 1995 letter of Cleary, Gottlieb, Steen & Hamilton on behalf of the
Public Securities Association (which letter, and the SEC staff's response
thereto, are publicly available February 17, 1995). The term "Collateral Term
Sheet" as used herein includes any subsequent Collateral Term Sheet that
reflects a substantive change in the information presented. Computational
Materials has the meaning assigned to it in the May 17, 1994 letter of Brown &
Wood on behalf of Kidder, Peabody & Co., Inc. (which letter, and the SEC staff's
response thereto, are publicly available May 20, 1994).
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters hereunder to purchase the Underwritten Certificates of any
Series to which this Agreement applies shall be subject to the following
conditions:
(a) To the accuracy on the date hereof and on the Closing Date
(as if made on such Closing Date), and as of the date of the
effectiveness of any amendment to the Registration Statement filed
prior to the Closing Date, of the representations and warranties on the
part of the Company and DFC contained herein and to the extent that
this Agreement provides that the Company and DFC are not making certain
representations and warranties, to the accuracy of the representations
and warranties provided by the parties making such representations and
warranties as of the date thereof and on the Closing Date (as if made
on such Closing Date) and as of the date of the effectiveness of any
amendment to the Registration Statement filed prior to the Closing
Date.
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<PAGE>
(b) The Registration Statement shall have become effective and
no stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and not
withdrawn and no proceedings for that purpose shall have been
instituted or threatened; and the Final Prospectus shall have been
filed or mailed for filing with the Commission in accordance with Rule
424 under the Act, and all actions required to be taken and all filings
required to be made by the Company under the Act prior to the sale of
the Underwritten Certificates shall have been duly taken or made.
(c) Certificates.
(i) The Company shall have delivered to the
Underwriters a certificate of the Company, signed on behalf of
the Company by the President or any Vice President or
Assistant Vice President of the Manager and dated the Closing
Date, to the effect that the signer of such certificate has
carefully examined the Registration Statement, the Final
Prospectus, and this Agreement and that: (A) the
representations and warranties of the Company in this
Agreement are true and correct in all material respects at and
as of the Closing Date with the same effect as if made on the
Closing Date; (B) the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; (C) no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge,
threatened; and (D) nothing has come to such Officer's
attention that would lead him or her to believe that the Final
Prospectus contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make
the statements, in the light of the circumstances under which
they were made, not misleading; and (E) there has been no
material adverse change or development involving a prospective
material adverse change in the business, operations, financial
condition, properties or assets of the Company.
(ii) DFC shall have delivered to the Underwriters a
certificate of DFC, signed by an authorized signatory of DFC
and dated the Closing Date, to the effect that the signer of
such certificate has carefully examined this Agreement, the
related Sales Agreement and that: (A) the representations and
warranties of DFC in this Agreement, the related Sales
Agreement are true and correct in all material respects at and
as of the Closing Date with the same effect as if made on the
Closing Date and (B) there has been no material adverse change
or development involving a prospective material adverse change
in the business, operations, financial condition, properties
or assets of DFC.
(d) Opinions.
(i) The Underwriters shall have received from Hunton
& Williams opinions of counsel, each dated the Closing Date
and satisfactory in form and substance to counsel for the
Underwriters, as to (A) various matters relating, among other
things, to the corporate status and authorization of the
Company and DFC, substantially in the form of Exhibit B-1
hereto; (B) various matters relating to the lien of the
trustee in the assets, substantially in the form of
Exhibit B-2 hereto; and (C) the applicable federal income tax
treatment of the Certificates.
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<PAGE>
(ii) The Underwriters shall have received copies of
any opinions of counsel furnished to the Rating Agencies (upon
which the Underwriters shall be entitled to rely) with respect
to the non-consolidation of the Company with its affiliates
and the "true sale" of the Assets, or, in the absence of such
true sale, that the Trustee has a perfected security interest
in the Assets, subject to no prior liens or encumbrances.
(iii) The Underwriters shall have received from
reputable counsel an opinion or opinions of counsel dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the income tax treatment of the
Securities in those states specified in the Terms Agreement.
(iv) The Underwriters shall have received from
counsel for the Underwriters such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Certificates, the Pooling and Servicing Agreement, this
Agreement, the Registration Statement, the Final Prospectus
and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel
such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(v) The Company shall have furnished to the
Underwriters the opinions of counsel to each Seller, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriter, as to the due authorization, execution
and delivery of each of the related Sales Agreements by the
related Seller and its enforceability against the related
Seller.
(vi) The Company shall have furnished to the
Underwriters the opinions of counsel to the Trustee, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the due authorization, execution
and delivery of the Pooling and Servicing Agreement by the
Trustee.
(vii) The Company shall have furnished to the
Underwriters the opinions of counsel to any Insurer, dated the
Closing Date and satisfactory in form and substance to counsel
for the Underwriters, as to the due issuance and
enforceability of the policies issued by such Insurer.
(e) The Underwritten Securities shall have been assigned the
ratings set forth in the Terms Agreement, which shall be in one of the
four highest rating categories, by one or more "nationally recognized
statistical rating organizations," as that term is defined by the
Commission from time to time, designated in the Terms Agreement. On the
Closing Date, (i) such rating or ratings shall not have been rescinded
and there shall not have been any downgrading, or public notification
of a possible downgrading or public notice of a possible change,
without indication of direction, and (ii) no downgrading, or public
notification of a possible downgrading or public notification of a
possible change, without indication of direction, shall have occurred
in the rating accorded any of the debt securities of any person
providing any form of credit enhancement for the Certificates by any
"nationally recognized statistical rating organization."
(f) The Underwriters shall have received from Price Waterhouse
LLP, certified public accountants, two letters, (i) one dated the date
hereof and satisfactory in form and substance to the Underwriters and
counsel for the Underwriters to the effect that they have
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<PAGE>
performed certain specified procedures as a result of which they have
determined that the Assets listed in Schedule I to each related Sales
Agreement conform with the description thereof in the Prospectus
Supplement under "The Asset Pool" and that a sampling of the Contract
Files relating to the Contracts and of the Trustee Mortgage Loan Files
relating to the Mortgage Loans conforms with the information contained
on the contract and mortgage loan data file tape upon which the
information in the Prospectus Supplement under the caption "The Asset
Pool" was based; and (ii) the other letter dated the Closing Date and
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters, reconfirming or updating the letter dated the date
hereof; to the further effect that they have performed certain
procedures as a result of which they have determined that the Assets
listed in Schedule I to the related Pooling and Servicing Agreement (A)
conform with the description thereof in the Prospectus Supplement under
the caption "The Asset Pool" and (B) conform with the information, if
any, set forth in the Company's report on Form 8-K with respect to such
Assets; and covering such other matters relating to the Trust as the
Underwriters may reasonably request.
(g) The Underwriters shall have received from the certified
public accountants of the Seller or Servicer, as applicable, a letter
or letters dated the date hereof and satisfactory in form and substance
to the Underwriters and counsel to the Underwriters to the effect that
they have performed certain specified procedures as a result of which
they determined that certain information of an accounting, financial
and statistical nature set forth in the Final Prospectus under the
caption "The Servicer" (or other caption relating to the Servicer's
servicing activities) agrees with the records of the Servicer.
(h) If applicable, and subject to the conditions set forth in
the related Pooling and Servicing Agreement, any reserve fund to be
established for the benefit of the holders of any related Certificates
shall have been established by the Company with the Trustee and any
initial deposit required to be made therein shall have been delivered
to the Trustee for deposit therein as contemplated by the related
Pooling and Servicing Agreement.
(i) On the Closing Date, there shall not have occurred any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company since the date of
the Terms Agreement which the Underwriter concludes in the reasonable
judgment of the Underwriter materially impairs the investment quality
of the Underwritten Certificates so as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the
Underwritten Certificates as contemplated by the Final Prospectus.
(j) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall
be satisfactory in form and substance to the Underwriters and counsel
for the Underwriters, and the Underwriters and counsel for the
Underwriters shall have received such information, certificates and
documents as they may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
if the Company is in breach of any covenants or agreements contained herein or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in all material respects and in
form and substance reasonably satisfactory to the Underwriters and counsel for
the Underwriters, the Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Underwriters. Notice of any such cancellation shall be given to the Company in
writing, or by telephone or telegraph and confirmed in writing.
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<PAGE>
7. Reimbursement of Underwriters' Expenses. If for any reason, other
than a default by the Underwriters pursuant to Section 9 hereof, the sale of the
Underwritten Certificates provided for herein is not consummated, the Company or
DFC will reimburse the Underwriters severally upon demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been reasonably incurred by them in connection with their investigation,
the preparation to market and the marketing of the Underwritten Certificates, or
in contemplation of the performance by them of their obligations hereunder.
8. Indemnification and Contribution. (a) The Company and DFC, jointly
and severally, indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, as follows:
(i) against any and all losses, claims, expenses, damages or
liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, the Final Prospectus, or any amendment or
supplement thereto, or any related Preliminary Final Prospectus, or
arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading; will
reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that (A) the Company and DFC will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
omission, or alleged untrue statement or omission, made in any of such
documents in reliance upon and in conformity with written information
furnished to the Company by an Underwriter, specifically for use
therein, except to the extent that any untrue statement or alleged
untrue statement therein results (or is alleged to have resulted) from
an error or material omission in the information concerning the
characteristics of the Assets furnished by the Company to the
Underwriters for use in the preparation of any Collateral Term Sheet,
Structural Term Sheet, Series Term Sheet or Computational Materials,
which error was not superseded or corrected by the delivery to the
Underwriters of corrected written or electronic information, or for
which the Company provided written notice of such error to the
Underwriters prior to the confirmation of the sale of the applicable
Certificates (any such uncorrected Asset information an "Asset Pool
Error"), and (B) such indemnity with respect to any Preliminary Final
Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Underwritten
Certificates which are the subject thereof if such person did not
receive a copy of the Final Prospectus (or the Final Prospectus as
amended or supplemented, excluding any documents incorporated therein
by reference) at or prior to the confirmation of the sale of such
Underwritten Certificates to such person in any case where such
delivery is required by the Act and the untrue statement or omission of
a material fact contained in such Preliminary Final Prospectus was
corrected in the Final Prospectus (or the Final Prospectus as amended
or supplemented, excluding any documents incorporated therein by
reference);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue
-18-
<PAGE>
statement or omission, (A) if such settlement is effected with the
written consent of the Company or (B) if such settlement is effected
without the written consent of the Company, but only if the Company has
received a notice from the Underwriters of such proposed settlement,
substantially reflecting the terms of such proposed settlement, and the
Company has not responded to such notice for 30 days after its receipt
thereof and has not responded as of the effective date of such
settlement; and
(iii) against any and all expense whatsoever (including the
fees and disbursements of counsel chosen by you), reasonably incurred
in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under clause
(i) or clause (ii) above.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its members, each of the Manager's
officers and directors who have signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Act or the
Exchange Act, against any and all losses, claims, expenses, damages or
liabilities to which the Company or any such member, director, officer or
controlling person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Final
Prospectus or any amendment or supplement thereto, or any related Preliminary
Final Prospectus, or arise out of, or are based upon, the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements made therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
specifically for use therein; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such member, director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action described therein, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability that it may have to any indemnified
party otherwise than under this Agreement. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may wish to do so, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party under this
Section 8, such indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and in respect of which
indemnity could have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party from all
liability on any
-19-
<PAGE>
claims that are the subject matter of such action.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section 8, for any reason other than as specified therein,
the parties entitled to indemnification by the terms thereof shall be entitled
to contribution to the amount paid or payable by such indemnified party as a
result of the losses, claims, expenses, damages or liabilities referred to in
subsection (a) or (b) above, except to the extent that contribution is not
permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters, the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the relative opportunities of the Company and the Underwriters to
correct and prevent any untrue statement or omission, the relative benefits
received by each party from the offering of the Underwritten Certificates
(taking into account the portion of the proceeds of the offering (before
deducting expenses) realized by each), and any other equitable considerations
appropriate under the circumstances. The Company and the Underwriters agree that
it would not be equitable if the amount of such contribution were to be
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method that does not
take account of the equitable considerations referred to in the second sentence
of this subsection (d). Notwithstanding the provisions of this subsection (d),
no Underwriter or person controlling such Underwriter shall be obligated to make
contribution hereunder that in the aggregate exceeds the total public offering
price of the Underwritten Certificates purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages which such Underwriter and
its controlling persons have otherwise been required to pay by reason of such
untrue statement or alleged untrue statement or omission. The Underwriters'
obligations to contribute shall be several in proportion to their respective
underwriting obligations and not joint.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Underwritten Certificates of any Class
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the portion of the Underwritten Certificates of such Class set forth opposite
their names in the Terms Agreement or in an attachment to the Terms Agreement
bears to the aggregate amount of Underwritten Certificates of such Class set
forth opposite the names of the remaining Underwriters) the Underwritten
Certificates of such Class which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
amount of Underwritten Certificates of such Class which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Underwritten Certificates of such Class as set forth in
the Final Prospectus, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Underwritten Certificates of such Class, and if such non-defaulting Underwriters
do not purchase all the Underwritten Certificates of such Class, this Agreement
will terminate without liability to any non-defaulting Underwriter or the
Company. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company for damages occasioned by
its default hereunder.
-20-
<PAGE>
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Underwriters, by notice given to the Company prior to
delivery of and payment for all Underwritten Certificates if prior to such time
(i) trading in securities generally on the New York Stock Exchange or American
Stock Exchange shall have been suspended or limited, or minimum approximate
prices shall have been established on such Exchange; (ii) a banking moratorium
shall have been declared by either federal or New York State authorities;
(iii) there shall have occurred any outbreak or escalation of hostilities or
other calamity or crisis, the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the Underwriters,
impracticable or inadvisable to market the Underwritten Certificates; or (iv)
there has been, since the date of the Terms Agreement or since the respective
dates as of which information is given in the Registration Statement or the
Final Prospectus any change in, or any development involving a prospective
change in, or affecting, the condition, financial or otherwise, earnings,
affairs or business of the Company, whether arising in the ordinary course of
business or otherwise, which in the reasonable judgment of the Underwriters
would materially impair the market for, or the investment quality of, the
Underwritten Certificates..
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and DFC or their respective representatives and the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or DFC or any of the members, officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Underwritten Certificates. The provisions of this Section 11 and
Sections 5(a)(v), 7 and 8 hereof shall survive the termination or cancellation
of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to it at the office or offices set forth
in the Terms Agreement; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it, Care of the Manager, at 7800 McCloud Road,
Greensboro, North Carolina 27409-9634, Attention: Treasurer; or, if sent to DFC,
will be mailed, delivered or telegraphed and confirmed to it at 7800 McCloud
Road, Greensboro, North Carolina 27409-9634, Attention: Treasurer. Copies of all
such notices also shall be mailed, delivered or telegraphed and confirmed to
Deutsche Financial Services Corporation, 655 Maryville Centre Drive, St. Louis,
MO 63141-5832, Attention: Treasurer.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the members,
officers and directors and controlling persons referred to in Section 8 hereof,
and their successors and assigns, and no other person will have any right or
obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the jurisdiction as may be specified in the Terms
Agreement. The Terms Agreement may be executed in any number of counterparts,
each of which shall for all purposes be deemed to be an original and all of
which shall together constitute but one and the same instrument.
15. Miscellaneous. Time shall be of the essence of this Agreement. This
Agreement supersedes all prior or contemporaneous agreements and understandings
relating to the subject matter hereof. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a writing
signed by the party against whom enforcement of such change, waiver, discharge
or termination is sought. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
-21-
Exhibit A
Deutsche Financial Capital Securitization LLC
Pass-Through Certificates
FORM OF TERMS AGREEMENT
Dated: ____________, 19__
To: Deutsche Financial Capital Securitization LLC (the "Company")
Deutsche Financial Capital Limited Liability Company ("DFC")
Re: Underwriting Agreement Standard Provisions dated
June, 1997 (the "Standard Provisions")
Series
Designation: Pass-Through Certificates, Series 19__-__,
Classes ________ _________________________ (collectively, the
"Certificates"). The Classes _______________ Certificates are
collectively referred to herein as the "Underwritten
Certificates."
UNDERWRITING AGREEMENT: Subject to the terms and conditions set forth
herein and to the terms of the Standard Provisions, which are incorporated by
reference herein, the Company hereby agrees to issue and sell to
______________________ (the "Underwriter"), and the Underwriter hereby agrees to
purchase from the Company, on ______________, 19__, the Underwritten Securities
at the purchase price and on the terms set forth below; provided, however, that
the obligations of the Underwriter are subject to: (i) receipt by the Company of
the ratings on the Certificates as set forth herein, (ii) receipt by the
Underwriter of the Sales Agreement (the "Sales Agreement"), dated as of
_______________, 19__, by and between the Company and [DFC], and the Pooling and
Servicing Agreement (as defined below), each being in form and substance
satisfactory to the Underwriter.
The Certificates will be issued by DFC Securitization Trust 19__-__
pursuant to a Pooling and Servicing Agreement, to be dated as of ______________,
19__ among the Company, Oakwood Acceptance Corporation, as servicer (the
"Servicer") and _______________________, as Trustee (the "Trustee"), which
incorporates by reference the Company's Standard Terms to Pooling and Servicing
Agreement (June 1997 Edition) (collectively, the "Pooling and Servicing
Agreement"). The Certificates will represent in the aggregate the entire
beneficial ownership interest in the assets of the Trust which will consist
primarily of retail installment sales contracts secured by units of manufactured
housing (the "Contracts") with original terms to maturity not exceeding 30 years
[and] conventional, one- to four-family, fully amortizing, [fixed][adjustable]
rate, first-lien residential mortgage loans (the "Mortgage Loans" and, together
with the Contracts, the "Assets") with original terms to maturity not exceeding
30 years, in each case having the characteristics described in the Prospectus
Supplement.
A-1
<PAGE>
The Company and the Servicer specifically covenant to make available on
the Closing Date for sale, transfer and assignment to the Trust, Contracts and
Mortgage Loans having the characteristics described in the Prospectus
Supplement; provided, however, that there may be nonmaterial variances from the
description of the Contracts [and] Mortgage Loans in the Prospectus Supplement
and the Contracts and Mortgage Loans actually delivered on the Closing Date.
REGISTRATION STATEMENT: References in the Standard Provisions to the
Registration Statement shall be deemed to include registration statement No.
333-24351.
INITIAL AGGREGATE SCHEDULE PRINCIPAL BALANCE OF ASSETS: Approximately
$_____________
CUT-OFF DATE: ___________________, 19__
TERMS OF THE CERTIFICATES:
<TABLE>
<CAPTION>
====================================================================================================================
Original
Principal Purchase
Class Balance Pass-Through Price of the
Designation (approximate)(1) Rate Rating Certificates
====================================================================================================================
<S> <C> <C> <C> <C>
[Specify Rating
Agency and Rating]
====================================================================================================================
</TABLE>
(1) Subject to a permitted variance of plus or minus 5% depending on the
Contracts and Mortgage Loans actually acquired by the Trust.
SUBORDINATION FEATURES: Losses and Shortfalls on the Contracts and
Mortgage Loans will be allocated among the Certificates as described in the
Prospectus Supplement. [Except as otherwise specified in the Prospectus
Supplement, the Class __ Certificates are subordinated to the rights of the
Class __ Certificates for purposes of the allocation of Realized Losses on the
Contracts and Mortgage Loans, as described in the Prospectus Supplement.]
RESERVE FUNDS:
DISTRIBUTION DATES: Each Distribution Date shall be the [___] day of
each month, or if such day is not a business day, on the next succeeding
business day, commencing in _______________ 19__.
[REMIC ELECTION: An election will be made to treat some or all of the
assets of the Trust as a real estate mortgage investment conduit for federal
income tax purposes (the "REMIC"). The Classes _______ Certificates will be
designated as "regular interests" in the REMIC and the Class R Certificates will
be designated as the "residual interest" in the REMIC.]
PURCHASE PRICE: The Underwriter has agreed to purchase the Underwritten
Certificates from the Company for a purchase price of ___________% of the
initial aggregate principal amount thereof, plus accrued interest thereon from
___________, 19__. Payment of the purchase price for the Underwritten
Certificates shall be made to the Company in federal or similar immediately
available funds payable to the order of the Company.
DENOMINATIONS: The Underwritten Certificates will be issued in
[book-entry] [certificated,
A-2
<PAGE>
fully-registered] form in minimum denominations of $_________ and integral
multiples of $_________ in excess thereof, except that one Certificate of each
Class of the Underwritten Certificates may be issued in a different
denomination.
FEES: It is understood that servicing fees will be withheld from the
payments on the Assets in each month prior to distributions on the Certificates
on the Distribution Date occurring in such month.
CLOSING DATE AND LOCATION: 10:00 a.m. Eastern Time on ___________,
19__, at the offices of Hunton & Williams, Riverfront Plaza, East Tower, 951
East Byrd Street, Richmond, Virginia 23219-4074. [The Company will deliver the
Underwritten Certificates in certificated, fully-registered form at the offices
of the Underwriter in __________, ______________ on ______________, 19__.] [The
Company will deliver the Underwritten Securities in book-entry form only,
through the same-day funds settlement system of The Depository Trust Company on
the Closing Date.]
CONDITIONS:
ADDITIONAL CONDITIONS:
DUE DILIGENCE: At any time prior to the Closing Date, the Underwriter
has the right to inspect the Contract Files [and] Trustee Mortgage Loan Files,
the related manufactured homes [and] mortgaged properties and the related loan
origination procedures to ensure conformity with the Final Prospectus and the
Prospectus Supplement.
CONTROLLING AGREEMENT: This Terms Agreement sets forth the complete
agreement among the Company, DFC and the Underwriter and fully supersedes all
prior agreements, both written and oral, relating to the issuance of the
Underwritten Certificates and all matters set forth herein. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Standard Provisions.
SERIES TERM SHEETS, COLLATERAL TERM SHEETS, STRUCTURAL TERM SHEETS AND
COMPUTATIONAL MATERIALS: The Underwriter hereby represents and warrants that (i)
information provided by it and attached hereto as Exhibit A constitutes all
"Collateral Term Sheets" (that are required to be filed with the Commission
within two business days of first use under the terms of the Public Securities
Association letter) disseminated by it in connection with the Underwritten
Certificates, (ii) information provided by it and attached hereto as Exhibit B
constitutes all "Structural Term Sheets" and "Computational Materials"
disseminated by it in connection with the Underwritten Certificates and (iii)
information provided by it and attached hereto as Exhibit C constitutes all
"Series Term Sheets" disseminated by it in connection with the Underwritten
Certificates.
INFORMATION PROVIDED BY THE UNDERWRITER: It is understood and agreed
that the information (i) set forth under the heading "Underwriting" in the
Prospectus Supplement and the sentence regarding the Underwriter's intention to
establish a market in the Underwritten Certificates on the Cover Page of the
Prospectus Supplement, and (ii) classified as Collateral Terms Sheets,
Structural Terms Sheets or Computational Materials, is the only information
furnished by the Underwriter for inclusion in the Registration Statement and the
Final Prospectus.
TRUSTEE: _________________________ will act as Trustee of the Trust.
[CUSTODIAN:]
BLUE SKY QUALIFICAITONS: The Underwriter specifies no jurisdictions and
the parties do not
A-3
<PAGE>
intend to qualify the Underwritten Securities in any jurisdiction.
STATE TAX OPINIONS:
BLACKOUT PERIOD: [None.]
APPLICABLE LAW: THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF [NEW YORK] WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
NOTICES: All communications hereunder will be in writing and effective
only upon receipt and, if sent to the Underwriter, will be mailed, delivered or
telegraphed and confirmed to the Underwriter at
___________________________________, Attention: ______________.
REQUEST FOR OPINIONS: (a) The Company and DFC hereby request and
authorize Hunton & Williams, as their counsel in this transaction, to issue on
behalf of the Company and DFC, such legal opinions to the Underwriter, its
counsel, the Trustee and the Rating Agencies as may be required by any and all
documents, certificates or agreements executed in connection with this
Agreement.
(b) The Underwriter hereby requests and authorizes
________________________________, as its special counsel in this transaction, to
issue on behalf of the Underwriter such legal opinions to the Company, DFC and
Hunton & Williams, as counsel to the Company and DFC, as may be required by any
and all documents, certificates or agreements executed in connection with this
Agreement.
A-4
<PAGE>
The Underwriter agrees, subject to the terms and provisions of the
Standard Provisions, a copy of which is attached hereto, and which is
incorporated by reference herein in its entirety and made a part hereof to the
same extent as if such provisions had been set forth in full herein, to purchase
the Underwritten Certificates.
[NAME OF UNDERWRITER]
By:________________________
Name:
Title:
Accepted and Acknowledged
As of the Date First
Above Written:
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
By: DEUTSCHE FINANCIAL CAPITAL I CORP.
By:_______________________
Name:
Title:
DEUTSCHE FINANCIAL CAPITAL LIMITED LIABILITY COMPANY
By: OAKWOOD ACCEPTANCE CORPORATION, member
By:
Name:
Title:
By: DEUTSCHE FINANCIAL SERVICES CORPORATION, member
By:
Name:
Title:
A-5
<PAGE>
Exhibit B-1
_____________, 19__
[Name and Address
of Underwriter(s)]
Deutsche Financial Capital Securitization LLC
Pass-Through Certificates, Series
Ladies and Gentlemen:
We have acted as special counsel to Deutsche Financial Capital
Securitization LLC, a North Carolina limited liability company ("DFC"), in
connection with the formation by it of DFC Securitization Trust 199_-_ (the
"Trust"), which consists primarily of a pool of retail installment sales
contracts (the "Contracts") secured by units of manufactured housing
("Manufactured Homes") and mortgage loans (the "Mortgage Loans" and, together
with the Contracts, the "Assets") secured by first liens on the real estate to
which the related Manufactured Homes are deemed permanently affixed.
The Trust was organized pursuant to a Pooling and Servicing Agreement
(the "Series Agreement"), dated as of _____ 1, 199_, by and among DFC, Oakwood
Acceptance Corporation, as servicer of the Assets (the "Servicer"), and
______________, National Association, as trustee (the "Trustee"), which
incorporates by reference DFC's Standard Terms to Pooling and Servicing
Agreement (June 1997 Edition) (together with the Series Agreement, the "Pooling
and Servicing Agreement"). We also have acted as special counsel to OAC in
connection with its role as Servicer for the Trust and to Deutsche Financial
Capital Limited Liability Company, a North Carolina limited liability company
(the "Seller"), as seller of the Assets to DFC. Capitalized terms used herein
but not defined herein shall have the meanings assigned to them in the Pooling
and Servicing Agreement.
The Trust is issuing today _________ Classes of Senior/Subordinated
Pass-Through Certificates, Series 199_-_ (collectively, the "Certificates"),
which Classes are described in the Pooling and Servicing Agreement. The Class
A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class A-6 Certificates, Class M
Certificates and Class B-1 Certificates (collectively, the "Offered
Certificates"), are being sold to you today pursuant to a terms agreement, dated
as of ________ __, 199_, among DFC, the Seller and each of you (the "Terms
Agreement"). This opinion is furnished to you in accordance with Section 6(d)(i)
of DFC's Underwriting Agreement Standard Provisions, June 1997 (the "Standard
Provisions"), the terms of which are incorporated by reference into the Terms
Agreement (the Terms Agreement together with the Standard Provisions being
referred to herein collectively as the "Underwriting Agreement").
In rendering the opinions expressed below, we have made such legal and
factual examinations and inquiries as we have deemed necessary or advisable for
the purpose of rendering this opinion, including but not limited to the
examination of the following:
a. DFC's registration statement on Form S-3 (No.
333-________), as amended (the
B1-1
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 2
"Registration Statement"), filed under the Securities Act of 1933, as
amended (the "Act"), and the Prospectus, dated ____ __, 1997 (the "Base
Prospectus"), and the Prospectus Supplement, dated ____ __, 1997 (the
"Prospectus Supplement," and collectively with the Base Prospectus, the
"Prospectus"), all relating to the Offered Certificates;
b. The Pooling and Servicing Agreement;
c. The form of the Certificate evidencing each Class of the
Certificates;
d. The sales agreement, dated as of ____ 1, 199_ (the "Sales
Agreement"), between the Seller and DFC (and acknowledged and agreed to
by the Trustee and by PNC Mortgage Bank, National Association, as
custodian), pursuant to which DFC acquired the Assets;
e. The Guaranty, dated the date hereof, of each of Deutsche
Financial Services Corporation, a Nevada corporation (the "Deutsche
Guaranty"), and Oakwood Acceptance Corporation, a North Carolina
corporation (the "OAC Guaranty"), relating to the representations and
warranties made in the Sales Agreement;
f. The Underwriting Agreement (together with the Limited
Guarantee, the Sales Agreement and the Pooling and Servicing Agreement,
the "Agreements");
g. The Articles of Organization, Certificate of Existence and
Operating Agreement of each of DFC and the Seller;
h. The Articles of Incorporation, as amended, and Bylaws of
each of OAC and Deutsche Financial Capital I Corp. (the "Manager"), the
Manager of DFC, together with a certificate of existence from the State
of North Carolina with respect to each of OAC and the Manager; and
i. Actions by Unanimous Written Consent of the Boards of
Directors of OAC and the Manager, respectively, pertaining to the
transactions described herein.
In rendering the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies, (iii) the
genuineness of signatures not witnessed by us, (iv) the legal capacity of
natural persons and (v) the due authorization, execution and delivery of all
documents by all parties thereto and the validity and binding effect thereof
(other than the authorization, execution and delivery of documents by DFC, OAC,
the Manager and the Seller, and the validity and binding effect thereof upon
DFC, OAC, the Manager and the Seller, to the extent we express our opinion on
such subjects below).
In addition, we have relied, as to factual matters, upon
representations included in the Agreements and other agreements and documents
delivered at the closing, and upon certificates of officers of DFC, OAC, the
Manager, Seller and the Trustee, and upon certificates of public officials.
Whenever the phrase "to our knowledge" or "known to us" is used in this opinion
letter, it refers to the actual knowledge of the attorneys of this firm involved
in the representation of DFC, OAC, the Manager
B1-2
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 3
and the Seller in connection with the transactions described herein without
independent investigation.
The obligations of the parties with respect to the Agreements are
subject, with respect to their enforceability, to the provisions of federal and
other applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws relating to or affecting the enforcement of creditors' rights generally,
now or hereafter in effect. Such obligations also are subject to usual equity
principles, which may limit enforcement under state law of certain remedies, but
which do not affect the validity of such documents. In addition, no opinion is
expressed as to the enforceability of any indemnification or contribution
provisions contained in the Agreements.
We do not purport to express an opinion on any laws other than those of
the States of North Carolina and New York and the United States of America. With
respect to the opinions expressed in numbered paragraphs 2 through 6 below, we
have, with your permission, relied upon the opinion of Myles E. Standish,
General Counsel to OAC, dated the date hereof to you as to matters relating to
OAC covered by such opinions. With respect to the opinion expressed in numbered
paragraph 4 below with respect to the Deutsche Guaranty, we have assumed the due
authorization, execution and delivery by Deutsche Financial Services Corporation
of the Deutsche Guaranty.
With respect to the opinions expressed in numbered paragraphs 6(a) and
(b) of Part I of our opinion below, we have not examined Mortgage Loan Documents
relating to the Mortgage Loans, and we express no opinion concerning such
documents, including the conformity of any of the foregoing to the requirements
of the Agreements. We have assumed that (i) for purposes of North Carolina law,
the Mortgages are deeds of trust, (ii) the Mortgage Loan Documents do not
prohibit the mortgagee from assigning or otherwise transferring any or all of
its rights thereunder and (iii) the Mortgage Notes will be continuously in the
State of Illinois in the possession of the Custodian.
I.
Based upon the foregoing and such other documents and information a
review of which we have considered necessary for the purposes hereof, and
subject to all the assumptions and qualifications set forth herein, we are of
the opinion that:
1. Each of DFC and the Seller is a limited liability company
organized and existing under the laws of the State of North Carolina,
and has the entity power to own its properties and to enter into the
transactions contemplated by the Agreements to which it is a party.
2. Each of OAC and the Manager is a corporation incorporated
and existing under the laws of the State of North Carolina, and has the
corporate power to own its properties and to enter into the
transactions contemplated by the Agreements to which it is a party.
3. Each of DFC, OAC, the Seller and the Manager has taken all
necessary entity action to authorize its execution and delivery of and
performance under the Agreements to which it is a party, and each such
Agreement has been duly authorized, executed and delivered by each of
DFC, OAC, the Seller and the Manager, as the case may be.
4. The Sales Agreement constitutes the legal, valid and
binding obligations of each
B1-3
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 4
of DFC and the Seller, as the case may be, enforceable against DFC and
the Seller, as the case may be, in accordance with its terms under
North Carolina law. The Pooling and Servicing Agreement constitutes the
legal, valid and binding obligations of each of DFC and OAC, as the
case may be, enforceable against DFC and OAC, as the case may be, in
accordance with its terms under New York law. The Deutsche Guaranty
constitutes the legal, valid and binding obligation of Deutsche
Financial Services Corporation, enforceable against it in accordance
with its terms under New York law. The OAC Guaranty constitutes the
legal, valid and binding obligation of Oakwood Acceptance Corporation,
enforceable against it in accordance with its terms under New York law.
5. To our knowledge, there is no investigation, action,
litigation or administrative proceeding of or before any court,
tribunal or governmental body currently pending or threatened against
DFC, OAC or the Seller (a) asserting the invalidity of the Agreements
or the Certificates, (b) seeking to prevent the consummation of any of
the transactions contemplated by the Agreements, (c) that would be
likely to impair materially the ability of DFC, OAC or the Seller, as
the case may be, to perform its obligations under any of the Agreements
or to affect materially and adversely the validity or enforceability of
any of the Agreements or the Certificates, or (d) that could reasonably
be expected to result in any material adverse change in the business,
operations, financial conditions, properties or assets of DFC, OAC or
the Seller, or the ability of DFC, OAC or the Seller to carry on its
business substantially as it is now conducted.
6. The execution, delivery and performance by each of DFC, OAC
and the Seller of the Agreements to which it is a party and the
transactions contemplated thereby will not (a) violate any provision of
the organizational documents of DFC, OAC or the Seller, or any existing
law or regulation, (b) to our knowledge, result in any breach of, or
constitute a default under, any order, judgment, writ, injunction or
decree of any court or governmental authority applicable to DFC, OAC or
the Seller, or (c) to our knowledge, conflict materially with or
constitute a material breach of, or a default under, any mortgage,
indenture, contract or other agreement to which DFC, OAC or the Seller
is a party or by which DFC, OAC or the Seller may be bound.
7. Upon due execution and authentication by the Trustee of
each Class of the Offered Certificates in accordance with the terms of
the Pooling and Servicing Agreement, and upon payment for the Offered
Certificates as provided for in the Underwriting Agreement, the Offered
Certificates will be validly issued and outstanding and the holders
thereof will be entitled to the benefits provided to Certificateholders
pursuant to the Pooling and Servicing Agreement.
8. (a) Assuming that the transfer of the Mortgage Notes and
the applicable Mortgages to the Trustee as contemplated by the Pooling
and Servicing Agreement is a sale and that the Mortgage Notes have been
duly endorsed and transferred to the Trustee as provided in the Sales
Agreement, the Trustee will obtain, under the laws of North Carolina,
all of the respective sellers' rights under the applicable Mortgages
(including whatever right the applicable sellers have to require the
trustee under the Mortgage to foreclose thereunder) when such Mortgage
Notes are delivered to the Trustee against payment therefor. In North
Carolina,
B1-4
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 5
when a mortgagee assigns or negotiates a note secured by a deed of
trust to a third party, the deed of trust is also automatically
assigned. Accordingly, the laws of North Carolina do not require the
recordation of an assignment or similar instrument as to the Mortgages
in the official land records to transfer to the Trustee the rights of
the applicable sellers in, to and under the Mortgages.
(b) If the transfer to the Trustee of Mortgage Notes and
the applicable Mortgages is deemed to be a grant of a security interest
therein to the Trustee and assuming that the Mortgage Notes have been
duly endorsed and delivered to the Trustee as provided in the Sales
Agreement, execution and recordation of assignments or similar
instruments as to the Mortgages are not required under the laws of
North Carolina to create or perfect such a security interest in the
Mortgage Notes and assuming that the Mortgage Notes have been duly
endorsed and delivered to the Trustee as provided in the Sales
Agreement, the beneficiary's rights under the applicable Mortgages will
inure to the Trustee when the Trustee becomes the owner and holder of
the Mortgage Notes after proper realization upon the Trustee's security
interest in such Mortgage Notes.
9. No consent, approval, authorization or order of,
registration or filing with, or notice to, any court or governmental
agency or body or official is required under the laws of the United
States of America or the State of North Carolina that, in our
experience, are normally applicable to transactions of the type
contemplated by the Agreements, for the consummation by each of DFC,
OAC and the Seller of the transactions contemplated by the Agreements
to which it is a party, except such as may be required under state
securities or "blue sky" laws of any jurisdiction in connection with
the purchase and distribution by each Underwriter of the Offered
Certificates.
10. The Trust established pursuant to the Pooling and
Servicing Agreement is not required, as a result of the offer and sale
of the Offered Certificates as contemplated by the Underwriting
Agreement, to be registered under the Investment Company Act of 1940,
as amended.
11. The Registration Statement has become effective under the
Act, and, to our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act.
12. The statements in the Base Prospectus under the captions
"Description of the Certificates," "The Pooling and Servicing
Agreements" and "ERISA Considerations," and the statements in the
Prospectus Supplement under the captions "The Trust," "Description of
the Offered Certificates" and "ERISA Considerations," insofar as such
statements constitute a summary of the documents referred to therein,
fairly summarize such documents and present the information called for
by the Act and the rules and regulations promulgated under the Act.
II.
We have participated in various conferences with the officers and
directors of DFC and its
B1-5
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 6
independent certified public accountants. In some conferences you and your
counsel also participated. At those conferences, the contents of the
Registration Statement and Prospectus were discussed and revised. Since the
dates of those conferences, we have inquired of certain officers whether there
has been any material change in the affairs of DFC.
Because of the inherent limitations in the independent verification of
factual matters, and the character of determinations involved in the preparation
of registration statements under the Act, we are not passing upon, and do not
assume any responsibility for, and make no representation that we have
independently verified, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except as
specifically set forth in paragraph 12 of Part I of our opinion above. Also, we
do not express any opinion or belief as to the financial statements or other
financial or statistical information contained or incorporated by reference into
the Registration Statement. However, subject to the foregoing, on the basis of
our participation in the conferences referred to above and our examination of
the documents referred to herein, we advise you that: (a) in our opinion, the
Registration Statement, when it became effective, and the Prospectus, as of its
date and as of the date hereof (other than the financial statements, schedules
and other financial data included therein or excluded therefrom or included in
or excluded from the exhibits to the Registration Statement or incorporated
therein by reference, as to which we express no opinion) comply as to form in
all material respects with the requirements of the Act and the rules and
regulations promulgated thereunder; and (b) to our knowledge, there are no
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required. We note that
the Pooling and Servicing Agreement will be filed as an exhibit to a Current
Report of DFC on Form 8-K within 15 days after the date hereof. Further, nothing
has come to our attention that leads us to believe that the Registration
Statement, when it became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein not misleading; or that
the Prospectus, as of its date and as of the date hereof, contained or contains
any untrue statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading; except that we make no statement with respect to the financial
statements or other financial or statistical data included therein or
incorporated therein by reference, including, but not limited to, the
information relating to the Assets, under the heading "The Asset Pool" and the
information relating to the Assets and financial data under the headings
"Maturity and Prepayment Considerations" and "Yield on the Offered Certificates"
in the Prospectus Supplement and the information set forth in the Prospectus
under the headings "Maturity and Prepayment Considerations" and "Yield
Considerations."
We consent to reliance on this opinion letter by you and by (i) the
Trustee, (ii) Fitch Investors Service, L.P. and Moody's Investors Service, Inc.,
each for the purpose of issuing a letter rating the Offered Certificates, and
(iii) Simpson Thacher & Bartlett, with respect to all matters of North Carolina
law covered hereby, for the purpose of rendering their opinion to the
Underwriters. Except as provided in the preceding sentence, this opinion letter
may not be relied upon by, nor may copies be delivered to, any person without
our prior written consent.
Very truly yours,
B1-6
<PAGE>
[Name of Underwriter(s)]
__________ __, 19 __
Page 7
B1-7
<PAGE>
Exhibit B-2
__________ __, 19__
[Name and Address
of Underwriter(s)]
[Name and Address
of Rating Agency]
Deutsche Financial Capital Securitization LLC
Pass-Through Certificates, Series
Ladies and Gentlemen:
We have acted as special counsel to Deutsche Financial Capital
Securitization LLC, a North Carolina limited liability company (the "Issuer"),
in connection with the formation by it of DFCS Trust 19__-__ (the "Trust"), the
assets of which consist primarily of a pool of retail installment sales
contracts (the "Contracts") secured by units of manufactured housing
("Manufactured Homes") [and] mortgage loans (the "Mortgage Loans," and, together
with the Contracts, the "Assets") secured by first liens on one-to-four-family
residential real properties (the "Mortgaged Properties").
The Trust was organized pursuant to a Pooling and Servicing Agreement
(the "Series Agreement"), dated as of _________ __, 19__, by and among the
Issuer, Oakwood Acceptance Corporation ("OAC") in its capacity as servicer of
the Contracts (the "Servicer"), and _____________________________, as trustee
(the "Trustee"). The Series Agreement incorporates by reference the Issuer's
Standard Terms to Pooling and Servicing Agreement (June 1997 Edition) (the
"Standard Terms," and, together with the Series Agreement, the "Pooling and
Servicing Agreement"). We also have acted as special counsel to OAC in
connection with its role as Servicer for the Trust. Capitalized terms used
herein but not defined herein shall have the meanings assigned to them in the
Pooling and Servicing Agreement.
The Trust is issuing today [number] classes of certificates
(collectively, the "Certificates"), which Classes are described in the Pooling
and Servicing Agreement. The Classes ________________ Certificates (the
"Underwritten Certificates") are being sold to you today pursuant to a terms
agreement (the "Terms Agreement") dated ___________ __, 19__, among you (the
"Underwriter"), the Issuer and Deutsche Financial Capital Limited Liability
Company, a North Carolina limited liability company ("DFC"). This opinion is
furnished to you in accordance with Section 6(e) of the Issuer's Underwriting
Agreement Standard Provisions (June 1997) (the "Standard Provisions"), the terms
of which are incorporated by reference into the Terms Agreement (the Terms
Agreement together with the Standard Provisions being referred to collectively
as the "Underwriting Agreement").
In rendering the opinions expressed below, we have examined the
following documents:
B2-1
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 2
(a) The Pooling and Servicing Agreement;
(b) The Sales Agreement, dated as of _____________ __, 19__
(the "Sales Agreement"), by and between DFC [OAC], as
seller, and the Issuer, as purchaser, pursuant to which
the Issuer acquired the Assets;
(c) Financing statements (the "Financing Statements") (1)
relating to the Contracts and the payments thereon and
proceeds thereof, naming [OAC] as debtor, DFC [OAC] as
secured party and the Issuer as assignee, (2) relating to
the Assets and the payments thereon and proceeds thereof,
naming DFC [OAC] as debtor, the Issuer as secured party
and the Trustee as assignee, and (3) relating to the
Assets and the payments thereon and proceeds thereof, the
Issuer's rights under the Sales Agreement and to the
[specify any reserve or other funds pledged or conveyed
to the Trustee by the Issuer], naming the Issuer as
debtor and the Trustee as secured party;
(d) The Underwriting Agreement (together with the Pooling and
Servicing Agreement and the Sales Agreement, the
"Agreements"); and
(e) The Purchase Agreement (the "Purchase Agreement"), dated
as of ____________ __, 19__, between the Issuer and
[Oakwood Financial Corporation, a Delaware corporation
("OFC")], pursuant to which [OFC] is purchasing the Class
________________ Certificates.
For the purposes of this opinion:
(i) the "North Carolina UCC" means the Uniform
Commercial Code as in effect in the State of
North Carolina;
(ii) "Money" means "money" as defined in Section
1-201 of the North Carolina UCC;
(iii) "Instruments" means "instruments" as defined
in Section 9-105(1)(i) of the North Carolina
UCC;
(iv) "General Intangibles" means "general
intangibles" as defined in Section 9-106 of
the North Carolina UCC; and
(v) "Chattel Paper" means "chattel paper" as
defined in Section 9-105(1)(b) of the North
Carolina UCC.
B2-2
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 3
In rendering the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies, (iii) the
genuineness of signatures not witnessed by us, (iv) the legal capacity of
natural persons and (v) the due authorization, execution and delivery of all
documents by all parties thereto and the validity, binding effect and
enforceability thereof. We note that you have received today our opinion with
respect to certain of the matters set forth in clause (v) of the preceding
sentence. Whenever the phrase "to our knowledge" or "known to us" is used
herein, it refers to the actual knowledge of the attorneys of this firm involved
in the representation of the Issuer, DFC and OAC in connection with the
transactions described herein without independent investigation.
We have not examined the actual Contracts [or] Mortgage Notes, the
assignments of the Contracts [or] the endorsements of the Mortgage Notes, any
Mortgages or assignments thereof or any other Contract Documents or Mortgage
Loan Documents (collectively, the "Asset Documents"), and we express no opinion
concerning the conformity of any of the foregoing to the requirements of any of
the Agreements. We have not examined the certificate of title, if any,
pertaining to the ownership or status of title to the property securing any
Contract and we express no opinion thereon. We also have not examined any title
records as they pertain to ownership or status of title to the Mortgaged
Property securing any Mortgage Note or the Real Property securing any Land
Secured Contract. [We call to your attention that the Initial Certification of
the Trustee delivered pursuant to Section 2.03(c)(1) of the Standard Terms
identifies certain document deficiencies with respect to the Mortgage Loan
Documents for certain Mortgage Loans. Consequently, certain assumptions made
herein regarding the conformity of the Asset Documents to the requirements of
any of the Agreements may not be true. We note that the Sales Agreement provides
that, in some but not all circumstances, DFC [OAC] is required to repurchase or
replace Assets to the extent of document deficiencies that are not cured.]
We have requested CSC Networks (formerly known as Prentice Hall Legal &
Financial Services) to review the UCC records maintained by the North Carolina
Secretary of State and the Register of Deeds of Guilford County, North Carolina
with respect to financing statements naming Oakwood Homes Corporation, [Oakwood
Mobile], or the Issuer, as debtor. Our opinion expressed in numbered paragraph 3
below is rendered in reliance upon the results of that search and upon a
certificate of officers of the respective companies relating thereto, dated the
date hereof (the "Officers' Certificate"), and is based upon the assumptions (i)
that no financing statements were filed against any of the aforementioned
companies as of the dates through which the respective related search reports
are current, which is no earlier than ____________ __, 19__, other than those
reflected in such search reports, and (ii) that no financing statements have
been filed against such companies since ______________ __, 19__. We assume no
liability for the search reports. Each of DFC [OAC] and the Issuer has
represented that the Assets formerly owned by it are subject to no liens, claims
or encumbrances having priority over the Trustee's lien thereon.
We do not purport to express an opinion on any laws other than those of
the State of North Carolina and the United States of America.
Based upon the foregoing and such other documents and information a
review of which we have considered necessary for the purposes hereof, and
subject to all other assumptions and
B2-3
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 4
qualifications set forth herein, we are of the opinion that:
1. In the event that either the transfer of the Assets by DFC
[and OAC] to the Issuer or the transfer of the Assets by the Issuer to
the Trustee is found not to be a "true sale," (a) DFC [and OAC] (i) has
granted to the Issuer a valid security interest under Article 9 of the
North Carolina UCC in the Contracts and the Mortgage Notes, and in the
proceeds thereof to the extent provided in Section 9-306 of the North
Carolina UCC, and (ii) has assigned to the Issuer a security interest
in the Manufactured Homes, and (b) the Issuer (i) has either granted or
assigned to the Trustee a valid security interest under Article 9 of
the North Carolina UCC in the Contracts and the Mortgage Notes, and in
the proceeds thereof to the extent provided in Section 9-306 of the
North Carolina UCC, and (ii) has assigned to the Trustee a security
interest in the Manufactured Homes securing the Contracts.
[2. The Issuer has granted to the Trustee a valid security
interest in the Money and Instruments comprising the [specify any fund
pledged to the Trustee], and in the proceeds thereof to the extent
provided in Section 9-306 of the North Carolina UCC.]
3. The Financing Statements are in appropriate form for filing
in the office of the North Carolina Secretary of State and in the
office of the Register of Deeds of Guilford County, North Carolina, and
the due indexing of the Financing Statements among the UCC financing
statement records in the office of the North Carolina Secretary of
State and in the office of the Register of Deeds of Guilford County,
North Carolina will be sufficient to perfect the security interests
created by the Sales Agreement and by the Pooling and Servicing
Agreement in the Contracts and in the proceeds thereof (to the extent a
security interest in proceeds of the Contracts was created as provided
in Section 9-306 of the North Carolina UCC) [and in that portion of the
[specify any fund pledged by the Issuer to the Trustee] consisting of
those items and types of collateral a security interest in which may be
perfected by filing a financing statement under the North Carolina
UCC]. Upon perfection of the Issuer's security interest in the
Contracts and of the Trustee's security interest in the Contracts, no
other security interest will be equal or prior to the Trustee's
security interest in the Contracts and in the proceeds thereof to the
extent provided in Section 9-306 of the North Carolina UCC.
B2-4
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 5
[4. Manufactured Homes located in Virginia, North Carolina and
South Carolina that do not become affixed to real estate are subject to
the Virginia Motor Vehicle Code, the North Carolina Motor Vehicle Code
and Chapter 19 of Title 56 of the Code of Laws of South Carolina,
respectively. As such, a security interest in a Manufactured Home
subject to the Virginia Motor Vehicle Code, the North Carolina Motor
Vehicle Code or Chapter 19 of Title 56 of the Code of Laws of South
Carolina generally is required to be noted on the certificate of title
for such Manufactured Home issued by the Virginia Department of Motor
Vehicles, the North Carolina Department of Motor Vehicles or the South
Carolina Department of Highways and Public Transportation,
respectively. [Based upon a representation from DFC [OAC] that each
certificate of title or application therefor relating to Manufactured
Homes located in Virginia, North Carolina or South Carolina lists DFC
[OAC] or the Trustee as the first secured party or first lienor, DFC
[OAC] or the Trustee has (or with respect to applications, will have
upon issuance of a certificate of title identifying DFC [OAC] or the
Trustee as first secured party or first lienor) a validly perfected
first priority security interest in each Manufactured Home located in
Virginia, North Carolina or South Carolina, and no other filing is
required in order to continue such perfection.] ]
[5. The security interest of the Trustee in the Mortgage Notes
and in those portions of the [specify any fund to be pledged by the
Issuer to the Trustee] that constitute Money or Instruments and in the
proceeds thereof (but only to the extent provided in Section 9-306 of
the [applicable] UCC) will be perfected upon the delivery of the
Mortgage Notes and such Money or Instruments to the Trustee. Upon such
delivery, no other security interest will be equal or prior to the
security interest of the Trustee in the Mortgage Notes and such Money
or Instruments. No opinion is expressed with respect to the continued
perfection of such security interest in the Mortgage Notes or such
Money or Instruments in the event that the Trustee relinquishes
possession thereof.]
Our opinions with respect to the security interests of the Trustee in
items of collateral other than the Manufactured Homes are subject to the
following qualifications:
(a) we call to your attention that a security interest in
proceeds is limited to the extent set forth in Section 9-306 of the
North Carolina UCC;
(b) we have assumed, based on the certifications contained in
the Officer's Certificate, that each item of collateral described
herein exists and that DFC [OAC] has sufficient rights in all such
collateral for the security interests therein granted to the Issuer
pursuant to the Sales Agreement to attach and that the Issuer has
sufficient rights in all such collateral for the security interests
therein granted or assigned pursuant to the Pooling and Servicing
Agreement to attach;
(c) we have assumed that payment for the Certificates has been
made in accordance with the Underwriting Agreement and the Purchase
Agreement and that payment for the Assets has been made in accordance
with the Sales Agreement;
B2-5
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 6
(d) we have assumed that the Contracts are Chattel Paper under
the North Carolina UCC and the Mortgage Notes are Instruments as
defined in the North Carolina UCC (but excluding any Instrument
constituting a "certificated security" as defined in Section 8-102 of
the North Carolina UCC);
(e) we have assumed, based on the certifications in the
Officer's Certificate, that each Contract validly created a security
interest in DFC [OAC] in the underlying Manufactured Home, which
security interest attached;
(f) we have assumed (i) that payment for the Offered
Certificates has been made in accordance with the Underwriting
Agreement and (ii) that [Oakwood Financial Corporation (a Nevada
corporation) ("OFC")] has made payment for the [Class X and Class R]
Certificates to the Issuer in accordance with the agreement between the
Issuer and [OFC] providing for such purchase and that the [Class X and
Class R] Certificates have been executed and authenticated by the
Trustee and delivered to [OFC] or its designee;
(g) we have assumed that each Contract is in one of the forms
supplied by DFC [OAC] in the Officers' Certificate, in which case the
Contracts are Chattel Paper under the North Carolina UCC;
(h) we have assumed, based upon the certifications in the
Officer's Certificate, the due execution of each endorsement of each
Mortgage Note, of an assignment or assignments of the Contracts and of
an assignment in recordable form of each Mortgage (an "Assignment"), in
each case from the originators thereof through any intervening
endorsees or assignees to the Issuer and the validity of each such
endorsement and assignment under relevant state law;
(i) we have assumed that, to the extent required by applicable
state law, each Assignment of a Mortgage securing a Mortgage Loan
necessary to reflect the transfer of such Mortgage from the related
originator to the Trustee has been duly recorded in the proper
recording office subject to no intervening recordations prior to the
date of recordation of such Assignment. We note that Section _______ of
the Standard Terms requires that the Issuer arrange for the recordation
of such Assignments promptly following closing and, in any event,
within one year after the Closing Date;
(j) we call to your attention that Section 552 of Title 11 of
the United States Code (the "Bankruptcy Code") limits the extent to
which property acquired by a debtor after the commencement of a
proceeding under the Bankruptcy Code may be subject to a security
interest arising from a security agreement entered into by the debtor
before the commencement of such a proceeding;
(k) we have assumed that any collateral subject to a security
interest that is perfected by delivery to or possession by the Trustee
is, and will be continuously, located in the [state where Trustee is
holding such collateral] and in the possession of the Trustee; we call
to your attention that the perfection and the effect of perfection and
non-perfection of the security interest of the Trustee may be governed
by laws other than the laws of such state to the extent that collateral
becomes located in a jurisdiction other than such state;
B2-6
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 7
(l) we have assumed, based on Section 204 of the Standard
Terms, that the Trustee has not received any notice as to any security
interest in the Contracts or Mortgage Notes [specify any fund pledged
to the Trustee], other than a notice with respect to the security
interest of the Trustee;
(m) we have assumed based on the certifications in the
Officer's Certificate, that each Mortgage Note is evidenced by only one
original document; and
(n) we have assumed based on the certifications in the
Officer's Certificate, that there are no agreements or understandings
among the Issuer, DFC, the Trustee, the Servicer or any other party
which would modify, release, terminate or delay the attachment of the
security interest granted to the Trustee under the Pooling and
Servicing Agreement.
As to factual matters, we have relied upon representations included in
the Agreements, in documents delivered at the closing, upon certificates of
officers of OAC, the Issuer, DFC and the Trustee, and upon certificates of
public officials. Without limiting the foregoing, we have relied upon
representations and warranties in the Agreements or upon certificates of OAC,
the Issuer, DFC or the Trustee:
(a) that DFC [OAC] has the full right to sell each Asset to
the Issuer and that the Issuer has the full right to sell each Asset to
the Trustee, and that, upon authorization, execution and delivery of
the Sales Agreement by all parties thereto, the Issuer will be the sole
beneficial owner of each Asset free and clear of liens, encumbrances
(except the lien created by the Pooling and Servicing Agreement), and
that the Issuer has not assigned any interest or participation in any
Asset other than to the Trustee that has not been released;
(b) that each Asset was acquired by each of DFC, [OAC,] the
Issuer and the Trustee in the ordinary course of their respective
businesses, in good faith, for value and without notice that it is
overdue or has been dishonored or of any defense against or claim to it
on the part of any person;
(c) as to the absence of any actual or constructive knowledge
or notice by DFC, [OAC,] the Issuer or the Trustee of any interest
contrary to the Trustee's interests under the Pooling and Servicing
Agreement;
(d) that the Trustee is not an affiliate of the Issuer; and
(e) that the Obligor's debt evidenced by any Contract is not
separately evidenced by any promissory note or other Instrument.
We do not express any opinion as to:
B2-7
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 8
(1) the priority of any security interest as against any claim
or lien in favor of the United States or any State or any agency or
instrumentality of the United States or any State (including, without
limitation, federal tax liens, liens under the Employee Retirement
Income Security Act of 1974, as amended, or claims given priority
pursuant to 31 U.S.C. 3713);
(2) the priority of any security interest as against any
liens, claims, or other interests that arise by operation of law and do
not require any filing or similar action in order to take priority over
a prior perfected security interest under the UCC of any relevant
jurisdiction;
(3) the priority of any security interest as against the
rights of any purchaser of any of the Assets who gives new value for
and takes possession of such Assets in the ordinary course of his
business without knowledge that any such Asset is subject to a security
interest as described in Section 9-308 of the North Carolina UCC or
against a purchaser of any of the Assets (including a secured party)
who could be afforded priority under Section 9-309 of the North
Carolina UCC;
(4) the priority of any security interest as against a lien
creditor (as defined in Section 9-301(3) of the North Carolina UCC) who
attached or levied prior to the perfection of the security interest of
the Trustee;
(5) the priority of any security interest as against a lien
creditor to the extent the security interest purports to secure future
advances or other extensions of credit subsequent to the date hereof
other than advances made pursuant to commitments existing on the date
of attachment by such lien creditor;
(6) the priority of any security interest in collateral
constituting proceeds of collateral subject to a third party's security
interest;
(7) the priority of any security interest as against another
secured party in possession of the related collateral prior to the
perfection of the Trustee's security interest through filing of the
Financing Statements;
(8) the priority of any security interest as against a
security interest perfected (i) without possession pursuant to Sections
8-313(1)(i) and 8-321 of the North Carolina UCC or Sections 9-304(4) or
(5) of the North Carolina UCC or (ii) without filing pursuant to
Sections 9-304(4) or (5) of the North Carolina UCC;
(9) the priority of any security interest as against a
purchase money security interest that could be perfected without
possession pursuant to Section 8-313(1)(h) of the North Carolina UCC or
that could be afforded priority under Section 9-312(4) of the North
Carolina UCC;
(10) the priority of any security interest as against the
rights of any person against whom the transfer to DFC, [OAC,] the
Issuer or the Trustee was "wrongful" within the meaning of Section
8-315 of the North Carolina UCC;
B2-8
<PAGE>
[Name of Underwriter(s)]
____________,19___
Page 9
(11) the priority of any security interest as against a
security interest perfected under the laws of another jurisdiction to
the extent the collateral subject to such security interest was located
in such jurisdiction within four months prior to the perfection of the
security interest of the Issuer or the Trustee;
(12) the priority of any security interest as against any
person who has entered into a subordination agreement or intercreditor
agreement with the Issuer or the Trustee with respect to any of the
collateral covered by the opinions set forth above; and
(13) whether or to what extent particular items included in
the [specify any fund pledged to Trustee] may constitute Money or
Instruments.
With respect to the Financing Statements, we call your attention to the
fact that the effectiveness of the Financing Statements will terminate (i)
unless appropriate continuation statements are filed within the time period
prescribed by relevant state law; (ii) with respect to collateral acquired more
than four months after any name change by the debtor, unless new appropriate
financing statements indicating the new name of the debtor are properly filed
before the expiration of four months after the debtor changes its name; and
(iii) four months after any relocation by the debtor of its chief executive
office or principal place of business to a new jurisdiction, unless such
security interest is perfected in such new jurisdiction within such time.
[We do not purport to express an opinion on any laws other than those
of the Commonwealth of Virginia, the State of North Carolina and the United
States of America, except to the extent that the opinion expressed in numbered
paragraph 4 above relates to matters of South Carolina law.]
We consent to reliance on this opinion letter by you and by (i) the
Trustee and (ii) [Underwriters' counsel], with respect to all matters of North
Carolina, South Carolina and Virginia law covered hereby, for the purpose of
rendering their opinion to the Underwriters. Except as provided in the preceding
sentence, this opinion letter is for your benefit only and may not be relied
upon by, nor may copies be delivered to, any other person without our prior
written consent.
Very truly yours,
B2-9
Exhibit 1.2
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
PASS-THROUGH CERTIFICATES
1997-I TERMS AGREEMENT
Dated: June 20, 1997
To: Deutsche Financial Capital Securitization LLC (the "Company")
Deutsche Financial Capital Limited Liability Company ("DFC")
Re: Underwriting Agreement Standard Provision dated
June 1997 (the "Standard Provisions")
Series
Designation: Pass-Through Certificates, Series 1997-I, Classes A-1, A-2, A-3,
A-4, A-5, A-6, M, B-1, B-2, X and R (collectively, the
"Certificates"). The Classes A-1, A-2, A-3, A-4, A-5, A-6, M and
B-1 Certificates are collectively referred to herein as the
"Underwritten Certificates."
UNDERWRITING AGREEMENT: Subject to the terms and conditions set forth
herein and to the terms of the Standard Provisions, which are incorporated by
reference herein, the Company hereby agrees to issue and sell to Credit
Suisse First Boston Corporation and Deutsche Morgan Grenfell Inc. (the
"Underwriters"), and the Underwriters hereby severally agree to purchase from
the Company, on June 27, 1997, the aggregate outstanding principal amount of the
Underwritten Certificates set forth in Schedule A hereto at the purchase price
and on the terms set forth below; PROVIDED, HOWEVER, that the obligations of
the Underwriters are subject to: (i) receipt by the Company of the ratings on
the Certificates as set forth herein, (ii) receipt by the Underwriters of
the Sales Agreement (the "Sales Agreement"), dated as of June 1, 1997, by and
between the Company and DFC, and the Pooling and Servicing Agreement (as
defined below), each being in form and substance satisfactory to the
Underwriters.
The Certificates will be issued by a trust (the "Trust") to be
established by the Company pursuant to a Pooling and Servicing Agreement, to
be dated as of June 1, 1997, among the Company, Oakwood Acceptance Corporation,
as servicer (the "Servicer") and PNC Bank, National Association, as Trustee
(the "Trustee") which incorporates by reference the Company's Standard Terms to
Pooling and Servicing Agreement (June 1997 Edition) (collectively, the "Pooling
and Servicing Agreement"). The Certificates will represent in the aggregate
the entire
<PAGE>
beneficial ownership interest in the assets of the Trust which will consist
primarily of (i) installment sales contracts (the "Contracts") secured by
security interests in manufactured homes and, with respect to certain of the
Contracts, secured by liens on the real estate on which the related manufactured
homes are located, and (ii) mortgage loans secured by first-liens on the real
estate to which the related manufactured homes are deemed permanently affixed
(the "Mortgage Loans" and, together with the Contracts, the "Assets") with
original terms to maturity not exceeding 30 years and, in each case, having the
characteristics described in the final Prospectus Supplement, dated June 20,
1997, relating to the Underwritten Certificates (the "Prospectus Supplement").
The Company and the Servicer specifically covenant to make available on
the Closing Date for sale, transfer and assignment to the Trust, Assets having
the characteristics described in the Prospectus Supplement; PROVIDED, HOWEVER,
that there may be nonmaterial variances from the description of the Assets in
the Prospectus Supplement and the Assets actually delivered on the Closing
Date.
REGISTRATION STATEMENT: References in the Standard Provisions to the
Registration Statement shall be deemed to include registration statement
No. 333-24351.
INITIAL AGGREGATE SCHEDULED PRINCIPAL BALANCE OF ASSETS: $161,394,769.36
CUT-OFF DATE: June 1, 1997.
TERMS OF THE CERTIFICATES:
Class Initial Principal Pass-Through Ratings Purchase
Designation Amount Rate Fitch Moody's Price
- ------------ ------- ---- ------ -------- ------
A-1 $34,713,000.00 6.400% "AAA" "Aaa" 99.771816%
A-2 $25,021,000.00 6.550% "AAA" "Aaa" 99.697181%
A-3 $19,982,000.00 6.750% "AAA" "Aaa" 99.648723%
A-4 $ 7,105,000.00 6.900% "AAA" "Aaa" 99.473538%
A-5 $20,813,000.00 7.100% "AAA" "Aaa" 99.502139%
A-6 $19,867,000.00 7.375% "AAA" "Aaa" 99.398612%
M $12,508,000.00 (1) "AA" "Aa3" 99.486722%
B-1 $14,929,000.00 (1) "BBB" "Baa2" 99.338340%
(1) The Pass-Through Rate for the (i) Class M Certificates will equal the
lesser of 7.275% or the Weighted Average Net Asset Rate and (ii) Class B-1
Certificates will equal the lesser of 7.525% or the Weighted Average Net Asset
Rate and
SUBORDINATION FEATURES: The Class M Certificates will be subordinated to
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6
Certificates (collectively, the "Class A Certificates"), the Class B-1
Certificates will be subordinated to the Class A Certificates and the Class M
Certificates and the Class B-2 Certificates will be subordinated to the Class A
Certificates, the Class M Certificates and the Class B-1 Certificates, all as
described in the Prospectus Supplement.
2
<PAGE>
DISTRIBUTION DATES: Each Distribution Date shall be the 15th day of each
month, or if such day is not a business day, on the next succeeding business
day, commencing in July, 1997.
REMIC ELECTION: An election will be made to treat some or all of the
assets of the Trust as one or more real estate mortgage investment conduits
for federal income tax purposes (the "REMIC").The Underwritten Certificates
will be designated as "regular interests" in the REMIC.
PURCHASE PRICE: The Underwriters have severally agreed to purchase the
Underwritten Certificates of each Class from the Company for the respective
purchase prices expressed in the table above as percentages of the initial
Certificate Principal Balance of each such Class. Payment of the purchase
price for the Underwritten Certificates shall be made to the Company in
federal or similar immediately available funds payable to the order of the
Company.
DENOMINATIONS: The Underwritten Certificates will be issued in book-entry
form in minimum denominations of $25,000 and integral multiples of $1 in
excess thereof.
FEES: It is understood that servicing fees may be withheld from the
payments on the Assets in each month prior to distributions on the Certificates
on the Distribution Date occuring in such month to the extent permissible under
the Pooling and Servicing Agreement.
CLOSING DATE AND LOCATION: 10:00 a.m. Eastern Time on June 27, 1997, at
the offices of Hunton & Williams, Riverfront Plaza, East Tower, 951 East
Byrd Street, Richmond, Virginia 23219-4074. The Company will deliver the
Underwritten Certificates in book-entry form only, through the same-day funds
settlement system of The Depository Trust Company on the Closing Date.
DUE DILIGENCE: At any time prior to the Closing Date, the Underwriters
have the right to inspect the Asset Files and the related loan origination
procedures and to confirm the existence of the related manufactured homes or
mortgaged properties to ensure conformity with the Final Prospectus and the
Prospectus Supplement.
CONTROLLING AGREEMENT: This Terms Agreement sets forth the complete
agreement among the Company, DFC and the Underwriters and fully supersedes
all prior agreements, both written and oral, relating to the issuance of the
Underwritten Certificates and all matters set forth herein. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to such terms in the Standard Provisions or the Prospectus Supplement.
COMPUTATIONAL MATERIALS: Each Underwriter hereby represents and warrants
that (i) any information attached hereto as Exhibit 1 constitutes all
"Collateral Term Sheets" (as such term is defined in the no-action letters
addressed to Kidder, Peabody Acceptance Corporation I, et al. dated May 20,
1994 and to the Public Securities Association dated February 17, 1995
(collectively, the "PSA Letters")) disseminated by it in connection with the
Underwritten Certifidates; (ii) any information attached hereto as Exhibit 2
constitutes all "Structural Term Sheets" and "Computational Materials"
disseminated by it in connection with the Underwritten Certificates and (iii)
any information attached hereto as Exhibit 3 constitutes all "Series Term
Sheets" (as such term is defined in the no-action letter addressed to Greenwood
Trust Company,
3
<PAGE>
Discover Card Master Trust I dated April 5, 1996) disseminated by it in
connection with the Underwritten Certificates.
For purposes hereof, as to each Underwriter, the term "Derived Information"
means such information, if any, in the Series Term Sheets, Collateral Term
Sheets, Structural Term Sheets and/or Computational Materials that is not
contained in either (i) the Prospectus taking into account information
incorporated therein by reference (other than information incorporated by
reference from the Series Term Sheets, Collateral Term Sheets, Structural Term
Sheets and/or Computational Materials) or (ii) any computer tape furnished by
the Company (the "Computer Tape"). Each Underwriter severally agrees, assuming
(i) all information provided by the Company (including the Computer Tape) is
accurate and complete in all material respects and (ii) the Company's
independent public accountants have determined that the Derived Information
agrees with the Computer Tape, to indemnify and hold harmless the Company,
each of the Company's officers and directors and each person who controls the
Company within the meaning of Section 15 of the Act against any and all losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement of a material fact contained in the Derived Information
prepared by such Underwriter and incorporated by reference into the Registration
Statement, or arise out of or are based upon the omission or alleged omission
to state in such Derived Information a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (except that no such
indemnity shall be available for any losses, claims, damages or liabilities,
or actions in respect thereof to the extent any such untrue statement or
alleged untrue statement therein results directly from an error in the
information on the Computer Tape or in any other information concerning the
Mortgage Loans or the Contracts provided by the Company to any Underwriter in
writing or through electronic transmission) and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by it in
connection with investigating or defending or preparing to defend any such
loss, claim, damage, liability or action as such expenses are incurred. The
obligations of an Underwriter under this paragraph shall be in addition to any
liability which such Underwriter may otherwise have. Notwithstanding the
provisions of this paragraph, no Underwriter shall be required to pay any
amount with respect to the indemnities provided hereunder in excess of the
underwriting discount or commission applicable to the Certificates purchased
by it hereunder.
INFORMATION PROVIDED BY EACH UNDERWRITER: It is understood and agreed that
the information set forth under the heading "Underwriting" in the Prospectus
Supplement and the sentence regarding each Underwriter's intention to
establish a market in the Underwritten Certificates on the Cover Page of the
Prospectus Supplement is the only information furnished by the Underwriters
for inclusion in the Registration Statement and the Final Prospectus.
TRUSTEE: PNC Bank, National Association will act as Trustee of the Trust.
BLUE SKY QUALIFICATIONS: The Underwriters specify no jurisdictions
and the parties do not intend to qualify the Underwritten Securities in any
jurisdiction. The Company has agreed to pay all costs and expenses incurred in
connection with the preparation of a blue sky survey to be delivered on or
prior to the Closing Date.
4
<PAGE>
STATE TAX OPINIONS: The Company shall deliver to the Underwriters an
opinion of counsel pursuant to Section 6(d)(iii) of the Standard Provisions
with respect to the State of North Carolina and the Commonwealth of
Pennsylvania.
BLACKOUT PERIOD: None.
APPLICABLE LAW: THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
NOTICES: All communications hereunder will be in writing and effective
only upon receipt and will be mailed, delivered or telegraphed and confirmed
to the parties at:
Deutsche Financial Capital Securitization LLC and
Deutsche Financial Limited Liability Company
7800 McCloud Road (27409-9634)
P.O. Box 27081
Greensboro, North Carolina 27425-7081
Attention: Treasurer
Credit Suisse First Boston Corporation
11 Madison Avenue
20th Floor
New York, New York 10010
Attention: Fiachra O'Driscoll
Deutsche Morgan Grenfell Inc.
31 West 52nd Street, 23rd Floor
New York, NY 10019
Attention: Vijay Radhakishum
REQUEST FOR OPINIONS: (a) The Company and DFC hereby request and
authorize Hunton & Williams as their counsel in this transaction, to issue on
behalf of the Company and DFC, such legal opinions to the Underwriters, their
respective counsel, the Trustee and the Rating Agencies as may be required by
any and all documents, certificates or agreements executed in connection with
this Agreement.
(b) The Underwriters hereby request and authorize Simpson Thacher &
Bartlett, as their special counsel in this transaction, to issue to the
Underwriters such legal opinions as they may require, and the Company shall
have furnished to Simpson Thacher & Bartlett such documents as they may
request for the purpose of enabling them to pass upon such matters.
Each Underwriter agrees, subject to the terms and provisions of the
Standard Provisions, a copy of which is attached hereto, and which is
incorporated by reference herein in its entirety
5
<PAGE>
and made a part hereof to the same extent as if such provisions had been set
forth in full herein, to purchase the Underwritten Certificates.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Philip Weingord
---------------------------------
Name: Philip Weingord
Title: Managing Director
DEUTSCHE MORGAN GRENFELL INC.
By: /s/ Vijay S. Radhakishun
---------------------------------
Name: Vijay S. Radhakishun
Title: Vice President
By: /s/ Douglas Monticciolo
---------------------------------
Name: Douglas Monticciolo
Title: Director
Accepted and acknowledged
As of the Date First Above Written:
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
By: DEUTSCHE FINANCIAL CAPITAL I CORP.
By: /s/ Douglas R. Muir
---------------------------------
Name: Douglas R. Muir
Title: Vice President
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
By: OAKWOOD ACCEPTANCE CORPORATION, member
By: /s/ Douglas R. Muir
---------------------------------
Title: Vice President
DEUTSCHE FINANCIAL SERVICES CORPORATION, member
By: Naran U. Burchinow
---------------------------------
Name: Naran U. Burchinow
Title: Senior Vice President
6
<PAGE>
SCHEDULE A
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class M and Class B-1
Certificates
Class A-1 Class A-2 Class A-3
Credit Suisse First Boston Corporation $17,356,500 $12,510,500 $ 9,991,000
Deutsche Morgan Grenfell Inc. ........ $17,356,500 $12,510,500 $ 9,991,000
Total............................... $34,713,000 $25,021,000 $19,982,000
Class A-4 Class A-5 Class A-6
Credit Suisse First Boston Corporation $ 3,552,500 $10,406,500 $ 9,933,500
Deutsche Morgan Grenfell Inc. ........ $ 3,552,500 $10,406,500 $ 9,993,500
Total............................... $ 7,105,000 $20,813,000 $19,867,000
Class M Class B-1
Credit Suisse First Boston Corporation $ 6,254,000 $ 7,464,500
Deutsche Morgan Grenfell Inc. ........ $ 6,254,000 $ 7,464,500
Total............................... $12,508,000 $14,929,000
Exhibit 2
Deutsche Senior/Subordinated Pass-Through Certificates,
Series 1997-I
COMPUTATIONAL MATERIALS
BOND PROFILE SUMMARY
- --------------------------------------------------------------------------------
Class Original Coupon Avg. CBE 1st Last Mod.
Name & Type Par % Life Yield Pay Pay Dur.
- --------------------------------------------------------------------------------
To Call:
A1 SENIOR 34,713,000 6.3500 1.10 6.223 7/97 9/99 1.02
A2 SENIOR 25,021,000 6.5500 3.10 6.558 9/99 7/01 2.71
A3 SENIOR 19,982,000 6.7000 5.10 6.769 7/01 12/03 4.17
A4 SENIOR 7,105,000 6.9000 7.10 6.959 12/03 3/05 5.43
A5 SENIOR 20,813,000 7.2000 10.00 7.270 3/05 3/10 6.86
A6 SENIOR 19,867,000 7.4750 15.43 7.570 3/10 11/13 8.83
M AA MEZZ 12,508,000 7.3750 10.46 7.470 2/02 11/13 6.78
B1 BBB SUB 14,929,000 7.5750 9.98 7.670 2/02 11/13 6.55
B2 BB SUB 6,456,769 9.2750 11.59 9.420 2/02 11/13 6.45
- -------------------------------
To Maturity:
A6 SENIOR 19,867,000 7.4750 16.93 7.569 3/10 2/20 9.20
M AA MEZZ 12,508,000 7.3750 10.72 7.470 2/02 7/16 6.85
B1 BBB SUB 14,929,000 7.5750 9.99 7.670 2/02 8/14 6.55
B2 BB SUB 6,456,769 9.2750 15.38 9.420 2/02 4/24 7.02
- --------------------------------------------------------------------------------
(1) Data assumes a prepayment speed of 160% MHP.
(2) Coupon and price assumed for computational material.
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
BOND PROFILE SUMMARY
-----------------------------------------------------------------------------
Percent of MHP: 0 75 100 160 200 300
-----------------------------------------------------------------------------
A1 SENIOR
Price: 99-31 Coupon: 6.3500 Original Par: 34,713,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 6.38 6.31 6.28 6.22 6.19 6.09
Average Life: 5.15 1.88 1.55 1.10 0.93 0.67
Duration: 4.08 1.69 1.41 1.02 0.87 0.63
First Prin Pay: 7/97 7/97 7/97 7/97 7/97 7/97
Last Prin Pay: 1/07 5/01 8/00 9/99 5/99 11/98
-----------------------------------------------------------------------------
A2 SENIOR
Price: 99-31 Coupon: 6.5500 Original Par: 25,021,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 6.61 6.59 6.58 6.56 6.54 6.51
Average Life: 11.82 5.37 4.43 3.10 2.59 1.84
Duration: 7.96 4.37 3.71 2.71 2.30 1.68
First Prin Pay: 1/07 5/01 8/00 9/99 5/99 11/98
Last Prin Pay: 4/11 5/04 3/03 7/01 11/00 11/99
-----------------------------------------------------------------------------
A3 SENIOR
Price: 99-27 Coupon: 6.7000 Original Par: 19,982,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 6.78 6.78 6.78 6.77 6.76 6.75
Average Life: 15.60 8.60 7.22 5.10 4.07 2.84
Duration: 9.36 6.31 5.52 4.17 3.45 2.51
First Prin Pay: 4/11 5/04 3/03 7/01 11/00 11/99
Last Prin Pay: 3/15 4/08 8/06 12/03 7/02 11/00
-----------------------------------------------------------------------------
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
BOND PROFILE SUMMARY
-----------------------------------------------------------------------------
Percent of MHP: 0 75 100 160 200 300
-----------------------------------------------------------------------------
A4 SENIOR
Price: 99-30+ Coupon: 6.9000 Original Par: 7,105,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 6.98 6.97 6.97 6.96 6.95 6.93
Average Life: 18.32 11.60 9.90 7.10 5.52 3.57
Duration: 10.08 7.73 6.94 5.43 4.44 3.06
First Prin Pay: 3/15 4/08 8/06 12/03 7/02 11/00
Last Prin Pay: 6/16 12/09 3/08 3/05 7/03 4/01
-----------------------------------------------------------------------------
A5 SENIOR
Price: 99-31+ Coupon: 7.2000 Original Par: 20,813,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 7.28 7.28 7.28 7.27 7.26 7.24
Average Life: 21.11 15.17 13.37 10.00 8.04 4.71
Duration: 10.49 8.90 8.27 6.86 5.87 3.85
First Prin Pay: 6/16 12/09 3/08 3/05 7/03 4/01
Last Prin Pay: 10/20 8/15 11/13 3/10 12/07 10/03
-----------------------------------------------------------------------------
A6 SENIOR
Price: 99-29 Coupon: 7.4750 Original Par: 19,867,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 7.57 7.57 7.57 7.57 7.57 7.56
Average Life: 24.76 20.66 18.97 15.43 13.19 8.93
Duration: 10.90 10.16 9.79 8.83 8.08 6.25
First Prin Pay: 10/20 8/15 11/13 3/10 12/07 10/03
Last Prin Pay: 10/22 1/19 4/17 11/13 9/11 11/07
---------------------------
To Maturity:
Price: 99-29+
Bond Yield: 7.57 7.57 7.57 7.57 7.57 7.56
Average Life: 25.83 21.83 20.39 16.93 14.65 9.94
Duration: 11.05 10.37 10.07 9.20 8.50 6.64
First Prin Pay: 10/20 8/15 11/13 3/10 12/07 10/03
Last Prin Pay: 4/26 12/23 5/22 2/20 12/17 6/13
-----------------------------------------------------------------------------
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
BOND PROFILE SUMMARY
-----------------------------------------------------------------------------
Percent of MHP: 0 75 100 160 200 300
-----------------------------------------------------------------------------
M AA MEZZ
Price: 99-27 Coupon: 7.3750 Original Par: 12,508,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 7.48 7.47 7.47 7.47 7.47 7.47
Average Life: 20.89 15.17 13.50 10.46 9.44 7.75
Duration: 10.21 8.58 8.00 6.78 6.37 5.61
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 10/22 1/19 4/17 11/13 9/11 11/07
---------------------------
To Maturity:
Price: 99-27
Bond Yield: 7.48 7.47 7.47 7.47 7.47 7.47
Average Life: 21.10 15.38 13.76 10.72 9.78 8.26
Duration: 10.24 8.62 8.05 6.85 6.48 5.82
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 11/24 3/21 12/19 7/16 11/14 7/11
-----------------------------------------------------------------------------
B1 BBB SUB
Price: 99-28 Coupon: 7.5750 Original Par: 14,929,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 7.68 7.68 7.67 7.67 7.67 7.66
Average Life: 20.60 14.69 13.03 9.98 9.07 7.60
Duration: 10.00 8.36 7.77 6.55 6.17 5.50
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 10/22 1/19 4/17 11/13 9/11 11/07
---------------------------
To Maturity:
Price: 99-28
Bond Yield: 7.68 7.68 7.67 7.67 7.67 7.67
Average Life: 20.61 14.70 13.04 9.99 9.11 7.74
Duration: 10.00 8.36 7.78 6.55 6.18 5.56
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 6/23 9/19 1/18 8/14 12/12 12/09
-----------------------------------------------------------------------------
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
BOND PROFILE SUMMARY
-----------------------------------------------------------------------------
Percent of MHP: 0 75 100 160 200 300
-----------------------------------------------------------------------------
B2 BB SUB
Price: 99-28 Coupon: 9.2750 Original Par: 6,456,769
-----------------------------------------------------------------------------
To Call:
Bond Yield: 9.43 9.43 9.42 9.42 9.42 9.41
Average Life: 21.55 16.27 14.59 11.59 10.29 8.10
Duration: 8.85 7.75 7.33 6.45 6.08 5.34
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 10/22 1/19 4/17 11/13 9/11 11/07
---------------------------
To Maturity:
Price: 99-28+
Bond Yield: 9.43 9.42 9.42 9.42 9.42 9.42
Average Life: 23.43 19.28 17.97 15.38 14.29 11.78
Duration: 9.00 8.05 7.72 7.02 6.80 6.31
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 12/26 7/26 2/26 4/24 4/22 6/18
-----------------------------------------------------------------------------
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-1
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 88 72 67 54 46 25
June 15, 1999 81 47 36 9 0 0
June 15, 2000 73 21 5 0 0 0
June 15, 2001 65 0 0 0 0 0
June 15, 2002 55 0 0 0 0 0
June 15, 2003 45 0 0 0 0 0
June 15, 2004 33 0 0 0 0 0
June 15, 2005 20 0 0 0 0 0
June 15, 2006 7 0 0 0 0 0
June 15, 2007 0 0 0 0 0 0
June 15, 2008 0 0 0 0 0 0
June 15, 2009 0 0 0 0 0 0
June 15, 2010 0 0 0 0 0 0
June 15, 2011 0 0 0 0 0 0
June 15, 2012 0 0 0 0 0 0
June 15, 2013 0 0 0 0 0 0
June 15, 2014 0 0 0 0 0 0
June 15, 2015 0 0 0 0 0 0
June 15, 2016 0 0 0 0 0 0
June 15, 2017 0 0 0 0 0 0
June 15, 2018 0 0 0 0 0 0
June 15, 2019 0 0 0 0 0 0
June 15, 2020 0 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 5.2 1.9 1.5 1.1 0.9 0.7
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-2
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 89 33
June 15, 2000 100 100 100 54 22 0
June 15, 2001 100 95 66 1 0 0
June 15, 2002 100 61 27 0 0 0
June 15, 2003 100 29 0 0 0 0
June 15, 2004 100 0 0 0 0 0
June 15, 2005 100 0 0 0 0 0
June 15, 2006 100 0 0 0 0 0
June 15, 2007 91 0 0 0 0 0
June 15, 2008 70 0 0 0 0 0
June 15, 2009 47 0 0 0 0 0
June 15, 2010 22 0 0 0 0 0
June 15, 2011 0 0 0 0 0 0
June 15, 2012 0 0 0 0 0 0
June 15, 2013 0 0 0 0 0 0
June 15, 2014 0 0 0 0 0 0
June 15, 2015 0 0 0 0 0 0
June 15, 2016 0 0 0 0 0 0
June 15, 2017 0 0 0 0 0 0
June 15, 2018 0 0 0 0 0 0
June 15, 2019 0 0 0 0 0 0
June 15, 2020 0 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 11.8 5.4 4.4 3.1 2.6 1.8
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-3
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 33
June 15, 2001 100 100 100 100 52 0
June 15, 2002 100 100 100 50 0 0
June 15, 2003 100 100 88 16 0 0
June 15, 2004 100 96 53 0 0 0
June 15, 2005 100 62 27 0 0 0
June 15, 2006 100 38 2 0 0 0
June 15, 2007 100 16 0 0 0 0
June 15, 2008 100 0 0 0 0 0
June 15, 2009 100 0 0 0 0 0
June 15, 2010 100 0 0 0 0 0
June 15, 2011 92 0 0 0 0 0
June 15, 2012 62 0 0 0 0 0
June 15, 2013 40 0 0 0 0 0
June 15, 2014 17 0 0 0 0 0
June 15, 2015 0 0 0 0 0 0
June 15, 2016 0 0 0 0 0 0
June 15, 2017 0 0 0 0 0 0
June 15, 2018 0 0 0 0 0 0
June 15, 2019 0 0 0 0 0 0
June 15, 2020 0 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 15.6 8.6 7.2 5.1 4.1 2.8
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-4
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 0
June 15, 2002 100 100 100 100 100 0
June 15, 2003 100 100 100 100 5 0
June 15, 2004 100 100 100 57 0 0
June 15, 2005 100 100 100 0 0 0
June 15, 2006 100 100 100 0 0 0
June 15, 2007 100 100 43 0 0 0
June 15, 2008 100 85 0 0 0 0
June 15, 2009 100 26 0 0 0 0
June 15, 2010 100 0 0 0 0 0
June 15, 2011 100 0 0 0 0 0
June 15, 2012 100 0 0 0 0 0
June 15, 2013 100 0 0 0 0 0
June 15, 2014 100 0 0 0 0 0
June 15, 2015 75 0 0 0 0 0
June 15, 2016 0 0 0 0 0 0
June 15, 2017 0 0 0 0 0 0
June 15, 2018 0 0 0 0 0 0
June 15, 2019 0 0 0 0 0 0
June 15, 2020 0 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 18.3 11.6 9.9 7.1 5.5 3.6
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-5
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 83
June 15, 2002 100 100 100 100 100 32
June 15, 2003 100 100 100 100 100 7
June 15, 2004 100 100 100 100 73 0
June 15, 2005 100 100 100 93 48 0
June 15, 2006 100 100 100 69 27 0
June 15, 2007 100 100 100 48 8 0
June 15, 2008 100 100 94 29 0 0
June 15, 2009 100 100 74 11 0 0
June 15, 2010 100 89 55 0 0 0
June 15, 2011 100 69 37 0 0 0
June 15, 2012 100 51 21 0 0 0
June 15, 2013 100 35 6 0 0 0
June 15, 2014 100 19 0 0 0 0
June 15, 2015 100 2 0 0 0 0
June 15, 2016 98 0 0 0 0 0
June 15, 2017 72 0 0 0 0 0
June 15, 2018 53 0 0 0 0 0
June 15, 2019 32 0 0 0 0 0
June 15, 2020 8 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 21.1 15.2 13.4 10.0 8.0 4.7
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-6
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 100
June 15, 2002 100 100 100 100 100 100
June 15, 2003 100 100 100 100 100 100
June 15, 2004 100 100 100 100 100 85
June 15, 2005 100 100 100 100 100 67
June 15, 2006 100 100 100 100 100 53
June 15, 2007 100 100 100 100 100 41
June 15, 2008 100 100 100 100 91 32
June 15, 2009 100 100 100 100 76 25
June 15, 2010 100 100 100 95 63 19
June 15, 2011 100 100 100 80 51 14
June 15, 2012 100 100 100 67 42 6
June 15, 2013 100 100 100 56 34 0
June 15, 2014 100 100 91 46 27 0
June 15, 2015 100 100 77 37 18 0
June 15, 2016 100 85 63 29 9 0
June 15, 2017 100 70 50 18 2 0
June 15, 2018 100 59 42 11 0 0
June 15, 2019 100 48 33 4 0 0
June 15, 2020 100 37 22 0 0 0
June 15, 2021 81 23 10 0 0 0
June 15, 2022 55 9 0 0 0 0
June 15, 2023 45 3 0 0 0 0
June 15, 2024 33 0 0 0 0 0
June 15, 2025 17 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 25.8 21.8 20.4 16.9 14.7 9.9
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class M
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 100
June 15, 2002 100 100 100 95 93 90
June 15, 2003 100 100 100 84 80 72
June 15, 2004 100 100 95 73 68 57
June 15, 2005 100 97 86 64 58 45
June 15, 2006 100 90 78 56 49 35
June 15, 2007 100 83 71 49 42 28
June 15, 2008 100 76 64 42 35 22
June 15, 2009 100 69 57 37 29 17
June 15, 2010 100 62 51 31 24 9
June 15, 2011 100 55 45 26 20 0
June 15, 2012 98 49 39 22 16 0
June 15, 2013 91 44 34 18 10 0
June 15, 2014 83 38 29 15 3 0
June 15, 2015 75 33 25 7 0 0
June 15, 2016 66 27 20 0 0 0
June 15, 2017 57 22 16 0 0 0
June 15, 2018 50 19 11 0 0 0
June 15, 2019 43 15 4 0 0 0
June 15, 2020 35 7 0 0 0 0
June 15, 2021 26 0 0 0 0 0
June 15, 2022 18 0 0 0 0 0
June 15, 2023 14 0 0 0 0 0
June 15, 2024 4 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 21.1 15.4 13.8 10.7 9.8 8.3
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class B-1
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
June 15, 1998 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 100
June 15, 2002 100 100 100 95 93 90
June 15, 2003 100 100 100 84 80 72
June 15, 2004 100 100 95 73 68 57
June 15, 2005 100 97 86 64 58 43
June 15, 2006 100 90 78 56 49 30
June 15, 2007 100 83 71 49 39 19
June 15, 2008 100 76 64 40 29 10
June 15, 2009 100 69 57 31 21 3
June 15, 2010 100 62 51 23 14 0
June 15, 2011 100 55 43 16 7 0
June 15, 2012 98 49 35 10 2 0
June 15, 2013 91 42 28 5 0 0
June 15, 2014 83 34 21 0 0 0
June 15, 2015 75 26 14 0 0 0
June 15, 2016 66 18 8 0 0 0
June 15, 2017 57 11 2 0 0 0
June 15, 2018 50 6 0 0 0 0
June 15, 2019 41 1 0 0 0 0
June 15, 2020 29 0 0 0 0 0
June 15, 2021 16 0 0 0 0 0
June 15, 2022 4 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 20.6 14.7 13.0 10.0 9.1 7.7
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class B-2
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 100
June 15, 2002 100 100 100 95 93 90
June 15, 2003 100 100 100 84 80 72
June 15, 2004 100 100 95 73 68 57
June 15, 2005 100 97 86 64 58 49
June 15, 2006 100 90 78 56 49 49
June 15, 2007 100 83 71 49 49 49
June 15, 2008 100 76 64 49 49 49
June 15, 2009 100 69 57 49 49 49
June 15, 2010 100 62 51 49 49 49
June 15, 2011 100 55 49 49 49 49
June 15, 2012 98 49 49 49 49 49
June 15, 2013 91 49 49 49 49 48
June 15, 2014 83 49 49 49 49 33
June 15, 2015 75 49 49 49 49 21
June 15, 2016 66 49 49 49 49 12
June 15, 2017 57 49 49 49 49 5
June 15, 2018 50 49 49 49 41 0
June 15, 2019 49 49 49 49 28 0
June 15, 2020 49 49 49 41 17 0
June 15, 2021 49 49 49 24 7 0
June 15, 2022 49 49 47 10 0 0
June 15, 2023 49 49 34 4 0 0
June 15, 2024 49 38 20 0 0 0
June 15, 2025 49 19 8 0 0 0
June 15, 2026 35 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 23.4 19.3 18.0 15.4 14.3 11.8
- ---------------------------------------------------------------------------------------------
</TABLE>
The above analysis is not intended to be a prospectus and any investment
decision with respect to the security should be made by you based solely upon
all of the information contained in the final prospectus. Under no circumstances
shall the information presented constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.
The securities may not be sold nor may an offer to buy be accepted prior to the
delivery of a final prospectus relating to the securities. The above preliminary
description of the underlying assets has been provided by the issuer and has not
been independently verified by Credit Suisse First Boston. All information
described above is preliminary, limited in nature and subject to completion or
amendment. Credit Suisse First Boston makes no representations that the above
referenced security will actually perform as described in any scenario
presented.
(CREDIT SUISSE/FIRST BOSTON logo appears here)
<PAGE>
Deutsche Senior/Subordinated Pass-Through Certificates,
Series 1997-I
COMPUTATIONAL MATERIALS
BOND PROFILE SUMMARY
- --------------------------------------------------------------------------------
Class Original Coupon Avg. CBE 1st Last Mod.
Name & Type Par % Life Yield Pay Pay Dur.
- --------------------------------------------------------------------------------
To Call:
A1 SENIOR 34,713,000 6.3500 1.10 6.223 7/97 9/99 1.02
A2 SENIOR 25,021,000 6.5500 3.10 6.558 9/99 7/01 2.71
A3 SENIOR 19,982,000 6.7000 5.10 6.769 7/01 12/03 4.17
A4 SENIOR 7,105,000 6.9000 7.10 6.959 12/03 3/05 5.43
A5 SENIOR 20,813,000 7.2000 10.00 7.270 3/05 3/10 6.86
A6 SENIOR 19,867,000 7.4750 15.43 7.570 3/10 11/13 8.83
M AA MEZZ 12,508,000 7.3750 10.46 7.470 2/02 11/13 6.78
B1 BBB SUB 14,929,000 7.5750 9.98 7.670 2/02 11/13 6.55
B2 BB SUB 6,456,769 9.2750 11.59 9.420 2/02 11/13 6.45
- -------------------------------
To Maturity:
A6 SENIOR 19,867,000 7.4750 16.93 7.569 3/10 2/20 9.20
M AA MEZZ 12,508,000 7.3750 10.72 7.470 2/02 7/16 6.85
B1 BBB SUB 14,929,000 7.5750 9.99 7.670 2/02 8/14 6.55
B2 BB SUB 6,456,769 9.2750 15.38 9.420 2/02 4/24 7.02
- --------------------------------------------------------------------------------
(1) Data assumes a prepayment speed of 160% MHP.
(2) Coupon and price assumed for computational material.
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
BOND PROFILE SUMMARY
-----------------------------------------------------------------------------
Percent of MHP: 0 75 100 160 200 300
-----------------------------------------------------------------------------
A1 SENIOR
Price: 99-31 Coupon: 6.3500 Original Par: 34,713,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 6.38 6.31 6.28 6.22 6.19 6.09
Average Life: 5.15 1.88 1.55 1.10 0.93 0.67
Duration: 4.08 1.69 1.41 1.02 0.87 0.63
First Prin Pay: 7/97 7/97 7/97 7/97 7/97 7/97
Last Prin Pay: 1/07 5/01 8/00 9/99 5/99 11/98
-----------------------------------------------------------------------------
A2 SENIOR
Price: 99-31 Coupon: 6.5500 Original Par: 25,021,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 6.61 6.59 6.58 6.56 6.54 6.51
Average Life: 11.82 5.37 4.43 3.10 2.59 1.84
Duration: 7.96 4.37 3.71 2.71 2.30 1.68
First Prin Pay: 1/07 5/01 8/00 9/99 5/99 11/98
Last Prin Pay: 4/11 5/04 3/03 7/01 11/00 11/99
-----------------------------------------------------------------------------
A3 SENIOR
Price: 99-27 Coupon: 6.7000 Original Par: 19,982,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 6.78 6.78 6.78 6.77 6.76 6.75
Average Life: 15.60 8.60 7.22 5.10 4.07 2.84
Duration: 9.36 6.31 5.52 4.17 3.45 2.51
First Prin Pay: 4/11 5/04 3/03 7/01 11/00 11/99
Last Prin Pay: 3/15 4/08 8/06 12/03 7/02 11/00
-----------------------------------------------------------------------------
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
BOND PROFILE SUMMARY
-----------------------------------------------------------------------------
Percent of MHP: 0 75 100 160 200 300
-----------------------------------------------------------------------------
A4 SENIOR
Price: 99-30+ Coupon: 6.9000 Original Par: 7,105,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 6.98 6.97 6.97 6.96 6.95 6.93
Average Life: 18.32 11.60 9.90 7.10 5.52 3.57
Duration: 10.08 7.73 6.94 5.43 4.44 3.06
First Prin Pay: 3/15 4/08 8/06 12/03 7/02 11/00
Last Prin Pay: 6/16 12/09 3/08 3/05 7/03 4/01
-----------------------------------------------------------------------------
A5 SENIOR
Price: 99-31+ Coupon: 7.2000 Original Par: 20,813,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 7.28 7.28 7.28 7.27 7.26 7.24
Average Life: 21.11 15.17 13.37 10.00 8.04 4.71
Duration: 10.49 8.90 8.27 6.86 5.87 3.85
First Prin Pay: 6/16 12/09 3/08 3/05 7/03 4/01
Last Prin Pay: 10/20 8/15 11/13 3/10 12/07 10/03
-----------------------------------------------------------------------------
A6 SENIOR
Price: 99-29 Coupon: 7.4750 Original Par: 19,867,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 7.57 7.57 7.57 7.57 7.57 7.56
Average Life: 24.76 20.66 18.97 15.43 13.19 8.93
Duration: 10.90 10.16 9.79 8.83 8.08 6.25
First Prin Pay: 10/20 8/15 11/13 3/10 12/07 10/03
Last Prin Pay: 10/22 1/19 4/17 11/13 9/11 11/07
---------------------------
To Maturity:
Price: 99-29+
Bond Yield: 7.57 7.57 7.57 7.57 7.57 7.56
Average Life: 25.83 21.83 20.39 16.93 14.65 9.94
Duration: 11.05 10.37 10.07 9.20 8.50 6.64
First Prin Pay: 10/20 8/15 11/13 3/10 12/07 10/03
Last Prin Pay: 4/26 12/23 5/22 2/20 12/17 6/13
-----------------------------------------------------------------------------
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
BOND PROFILE SUMMARY
-----------------------------------------------------------------------------
Percent of MHP: 0 75 100 160 200 300
-----------------------------------------------------------------------------
M AA MEZZ
Price: 99-27 Coupon: 7.3750 Original Par: 12,508,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 7.48 7.47 7.47 7.47 7.47 7.47
Average Life: 20.89 15.17 13.50 10.46 9.44 7.75
Duration: 10.21 8.58 8.00 6.78 6.37 5.61
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 10/22 1/19 4/17 11/13 9/11 11/07
---------------------------
To Maturity:
Price: 99-27
Bond Yield: 7.48 7.47 7.47 7.47 7.47 7.47
Average Life: 21.10 15.38 13.76 10.72 9.78 8.26
Duration: 10.24 8.62 8.05 6.85 6.48 5.82
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 11/24 3/21 12/19 7/16 11/14 7/11
-----------------------------------------------------------------------------
B1 BBB SUB
Price: 99-28 Coupon: 7.5750 Original Par: 14,929,000
-----------------------------------------------------------------------------
To Call:
Bond Yield: 7.68 7.68 7.67 7.67 7.67 7.66
Average Life: 20.60 14.69 13.03 9.98 9.07 7.60
Duration: 10.00 8.36 7.77 6.55 6.17 5.50
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 10/22 1/19 4/17 11/13 9/11 11/07
---------------------------
To Maturity:
Price: 99-28
Bond Yield: 7.68 7.68 7.67 7.67 7.67 7.67
Average Life: 20.61 14.70 13.04 9.99 9.11 7.74
Duration: 10.00 8.36 7.78 6.55 6.18 5.56
First Prin Pay: 3/12 3/05 12/03 2/02 1/02 1/02
Last Prin Pay: 6/23 9/19 1/18 8/14 12/12 12/09
-----------------------------------------------------------------------------
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-1
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 88 72 67 54 46 25
June 15, 1999 81 47 36 9 0 0
June 15, 2000 73 21 5 0 0 0
June 15, 2001 65 0 0 0 0 0
June 15, 2002 55 0 0 0 0 0
June 15, 2003 45 0 0 0 0 0
June 15, 2004 33 0 0 0 0 0
June 15, 2005 20 0 0 0 0 0
June 15, 2006 7 0 0 0 0 0
June 15, 2007 0 0 0 0 0 0
June 15, 2008 0 0 0 0 0 0
June 15, 2009 0 0 0 0 0 0
June 15, 2010 0 0 0 0 0 0
June 15, 2011 0 0 0 0 0 0
June 15, 2012 0 0 0 0 0 0
June 15, 2013 0 0 0 0 0 0
June 15, 2014 0 0 0 0 0 0
June 15, 2015 0 0 0 0 0 0
June 15, 2016 0 0 0 0 0 0
June 15, 2017 0 0 0 0 0 0
June 15, 2018 0 0 0 0 0 0
June 15, 2019 0 0 0 0 0 0
June 15, 2020 0 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 5.2 1.9 1.5 1.1 0.9 0.7
- ---------------------------------------------------------------------------------------------
</TABLE>
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-2
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 89 33
June 15, 2000 100 100 100 54 22 0
June 15, 2001 100 95 66 1 0 0
June 15, 2002 100 61 27 0 0 0
June 15, 2003 100 29 0 0 0 0
June 15, 2004 100 0 0 0 0 0
June 15, 2005 100 0 0 0 0 0
June 15, 2006 100 0 0 0 0 0
June 15, 2007 91 0 0 0 0 0
June 15, 2008 70 0 0 0 0 0
June 15, 2009 47 0 0 0 0 0
June 15, 2010 22 0 0 0 0 0
June 15, 2011 0 0 0 0 0 0
June 15, 2012 0 0 0 0 0 0
June 15, 2013 0 0 0 0 0 0
June 15, 2014 0 0 0 0 0 0
June 15, 2015 0 0 0 0 0 0
June 15, 2016 0 0 0 0 0 0
June 15, 2017 0 0 0 0 0 0
June 15, 2018 0 0 0 0 0 0
June 15, 2019 0 0 0 0 0 0
June 15, 2020 0 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 11.8 5.4 4.4 3.1 2.6 1.8
- ---------------------------------------------------------------------------------------------
</TABLE>
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-3
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 33
June 15, 2001 100 100 100 100 52 0
June 15, 2002 100 100 100 50 0 0
June 15, 2003 100 100 88 16 0 0
June 15, 2004 100 96 53 0 0 0
June 15, 2005 100 62 27 0 0 0
June 15, 2006 100 38 2 0 0 0
June 15, 2007 100 16 0 0 0 0
June 15, 2008 100 0 0 0 0 0
June 15, 2009 100 0 0 0 0 0
June 15, 2010 100 0 0 0 0 0
June 15, 2011 92 0 0 0 0 0
June 15, 2012 62 0 0 0 0 0
June 15, 2013 40 0 0 0 0 0
June 15, 2014 17 0 0 0 0 0
June 15, 2015 0 0 0 0 0 0
June 15, 2016 0 0 0 0 0 0
June 15, 2017 0 0 0 0 0 0
June 15, 2018 0 0 0 0 0 0
June 15, 2019 0 0 0 0 0 0
June 15, 2020 0 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 15.6 8.6 7.2 5.1 4.1 2.8
- ---------------------------------------------------------------------------------------------
</TABLE>
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-4
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 0
June 15, 2002 100 100 100 100 100 0
June 15, 2003 100 100 100 100 5 0
June 15, 2004 100 100 100 57 0 0
June 15, 2005 100 100 100 0 0 0
June 15, 2006 100 100 100 0 0 0
June 15, 2007 100 100 43 0 0 0
June 15, 2008 100 85 0 0 0 0
June 15, 2009 100 26 0 0 0 0
June 15, 2010 100 0 0 0 0 0
June 15, 2011 100 0 0 0 0 0
June 15, 2012 100 0 0 0 0 0
June 15, 2013 100 0 0 0 0 0
June 15, 2014 100 0 0 0 0 0
June 15, 2015 75 0 0 0 0 0
June 15, 2016 0 0 0 0 0 0
June 15, 2017 0 0 0 0 0 0
June 15, 2018 0 0 0 0 0 0
June 15, 2019 0 0 0 0 0 0
June 15, 2020 0 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 18.3 11.6 9.9 7.1 5.5 3.6
- ---------------------------------------------------------------------------------------------
</TABLE>
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-5
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 83
June 15, 2002 100 100 100 100 100 32
June 15, 2003 100 100 100 100 100 7
June 15, 2004 100 100 100 100 73 0
June 15, 2005 100 100 100 93 48 0
June 15, 2006 100 100 100 69 27 0
June 15, 2007 100 100 100 48 8 0
June 15, 2008 100 100 94 29 0 0
June 15, 2009 100 100 74 11 0 0
June 15, 2010 100 89 55 0 0 0
June 15, 2011 100 69 37 0 0 0
June 15, 2012 100 51 21 0 0 0
June 15, 2013 100 35 6 0 0 0
June 15, 2014 100 19 0 0 0 0
June 15, 2015 100 2 0 0 0 0
June 15, 2016 98 0 0 0 0 0
June 15, 2017 72 0 0 0 0 0
June 15, 2018 53 0 0 0 0 0
June 15, 2019 32 0 0 0 0 0
June 15, 2020 8 0 0 0 0 0
June 15, 2021 0 0 0 0 0 0
June 15, 2022 0 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 21.1 15.2 13.4 10.0 8.0 4.7
- ---------------------------------------------------------------------------------------------
</TABLE>
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class A-6
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 100
June 15, 2002 100 100 100 100 100 100
June 15, 2003 100 100 100 100 100 100
June 15, 2004 100 100 100 100 100 85
June 15, 2005 100 100 100 100 100 67
June 15, 2006 100 100 100 100 100 53
June 15, 2007 100 100 100 100 100 41
June 15, 2008 100 100 100 100 91 32
June 15, 2009 100 100 100 100 76 25
June 15, 2010 100 100 100 95 63 19
June 15, 2011 100 100 100 80 51 14
June 15, 2012 100 100 100 67 42 6
June 15, 2013 100 100 100 56 34 0
June 15, 2014 100 100 91 46 27 0
June 15, 2015 100 100 77 37 18 0
June 15, 2016 100 85 63 29 9 0
June 15, 2017 100 70 50 18 2 0
June 15, 2018 100 59 42 11 0 0
June 15, 2019 100 48 33 4 0 0
June 15, 2020 100 37 22 0 0 0
June 15, 2021 81 23 10 0 0 0
June 15, 2022 55 9 0 0 0 0
June 15, 2023 45 3 0 0 0 0
June 15, 2024 33 0 0 0 0 0
June 15, 2025 17 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 25.8 21.8 20.4 16.9 14.7 9.9
- ---------------------------------------------------------------------------------------------
</TABLE>
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class M
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
- ---------------------------------------------------------------------------------------------
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 100
June 15, 2002 100 100 100 95 93 90
June 15, 2003 100 100 100 84 80 72
June 15, 2004 100 100 95 73 68 57
June 15, 2005 100 97 86 64 58 45
June 15, 2006 100 90 78 56 49 35
June 15, 2007 100 83 71 49 42 28
June 15, 2008 100 76 64 42 35 22
June 15, 2009 100 69 57 37 29 17
June 15, 2010 100 62 51 31 24 9
June 15, 2011 100 55 45 26 20 0
June 15, 2012 98 49 39 22 16 0
June 15, 2013 91 44 34 18 10 0
June 15, 2014 83 38 29 15 3 0
June 15, 2015 75 33 25 7 0 0
June 15, 2016 66 27 20 0 0 0
June 15, 2017 57 22 16 0 0 0
June 15, 2018 50 19 11 0 0 0
June 15, 2019 43 15 4 0 0 0
June 15, 2020 35 7 0 0 0 0
June 15, 2021 26 0 0 0 0 0
June 15, 2022 18 0 0 0 0 0
June 15, 2023 14 0 0 0 0 0
June 15, 2024 4 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 21.1 15.4 13.8 10.7 9.8 8.3
- ---------------------------------------------------------------------------------------------
</TABLE>
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
<TABLE>
<CAPTION>
Percent of Principal Outstanding of Class B-1
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Percent of MHP: 0 75 100 160 200 300
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Initial Percent 100 100 100 100 100 100
June 15, 1998 100 100 100 100 100 100
June 15, 1999 100 100 100 100 100 100
June 15, 2000 100 100 100 100 100 100
June 15, 2001 100 100 100 100 100 100
June 15, 2002 100 100 100 95 93 90
June 15, 2003 100 100 100 84 80 72
June 15, 2004 100 100 95 73 68 57
June 15, 2005 100 97 86 64 58 43
June 15, 2006 100 90 78 56 49 30
June 15, 2007 100 83 71 49 39 19
June 15, 2008 100 76 64 40 29 10
June 15, 2009 100 69 57 31 21 3
June 15, 2010 100 62 51 23 14 0
June 15, 2011 100 55 43 16 7 0
June 15, 2012 98 49 35 10 2 0
June 15, 2013 91 42 28 5 0 0
June 15, 2014 83 34 21 0 0 0
June 15, 2015 75 26 14 0 0 0
June 15, 2016 66 18 8 0 0 0
June 15, 2017 57 11 2 0 0 0
June 15, 2018 50 6 0 0 0 0
June 15, 2019 41 1 0 0 0 0
June 15, 2020 29 0 0 0 0 0
June 15, 2021 16 0 0 0 0 0
June 15, 2022 4 0 0 0 0 0
June 15, 2023 0 0 0 0 0 0
June 15, 2024 0 0 0 0 0 0
June 15, 2025 0 0 0 0 0 0
June 15, 2026 0 0 0 0 0 0
June 15, 2027 0 0 0 0 0 0
Avg Life In Years: 20.6 14.7 13.0 10.0 9.1 7.7
- ---------------------------------------------------------------------------------------------
</TABLE>
This Structural Term Sheet, Collateral Term Sheet, or Computational Materials,
as appropriate (the "Material"), is privileged and confidential, is intended for
use by the addressee only, and may not be provided to any third party other than
the addressee's legal, tax, financial and/or accounting advisors for the
purposes of evaluating such information. Prospective investors are advised to
read carefully, and should rely solely on, the final prospectus and prospectus
supplement (the "Final Prospectus") related to Deutsche Financial Capital
Securitization, LLC, Senior/Subordinated Pass-Through Certificates, Series
1997-I (the "DFC 97-I Certificates") in making their investment decisions. This
material does not include all relevant information relating to the DFC 97-I
Certificates described herein, particularly with respect to the risk and special
considerations associated with an investment in DFC 97-I Certificates. All
information contained herein is preliminary and it is anticipated that such
information will change. Any information contained herein will be more fully
described in, and will be fully superseded by the preliminary prospectus
supplement and Final Prospectus. Although the information contained in the
material is based on sources the Underwriters believe to be reliable, the
Underwriters make no representation or warranty that such information is
accurate or complete. Such information should not be viewed as projections,
forecasts, predictions, or opinions with respect to value. Prior to making any
investment decision, a prospective investor shall receive and fully review the
Final Prospectus. NOTHING HEREIN SHOULD BE CONSIDERED AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.
(Deutsche Morgan Grenfell logo appears here)
<PAGE>
_______________________________________________________________________________
STANDARD TERMS
TO
POOLING AND SERVICING AGREEMENT
_____________________________________________
Deutsche Financial Capital Securitization LLC
Pass-Through Certificates
June 1997 Edition
_______________________________________________________________________________
Standard Terms to Pooling and Servicing Agreement June 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions..............................................1
ARTICLE II
THE ASSETS
Section 2.01. Assignment of Assets....................................24
Section 2.02. The Contracts...........................................24
Section 2.03. The Mortgage Loans......................................26
Section 2.04. Representations and Warranties of the Trustee...........29
Section 2.05. Representations and Warranties as to Assets.............30
Section 2.06. Purchase or Substitution of Certain Assets..............30
ARTICLE III
ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS
Section 3.01. The Servicer............................................35
Section 3.02. Maintenance of Records; Inspection of Asset Files.......35
Section 3.03. Collection of Payments on Assets;
Servicing Delinquent Accounts...........................36
Section 3.04. Advances................................................36
Section 3.05. Servicing Account.......................................37
Section 3.06. Certificate Account.....................................37
Section 3.07. Withdrawals From Certificate
Account; Remittance Amounts.............................38
Section 3.08. Realization upon Defaulted Assets.......................39
Section 3.09. Title, Conservation, and Disposition of
Repo Property and REO Property..........................40
Section 3.10. Full Prepayments and Liquidations; Trustee to
Cooperate; Release of Mortgage Files....................42
Section 3.11. Maintenance of Security Interests and Other Liens
in Manufactured Homes...................................43
Section 3.12. Due-on-Sale Clauses and Assumption
Agreements..............................................43
Section 3.13. Annual Accountants' Certificate;
Annual Statement as to Compliance.......................44
Section 3.14. Servicing Fees..........................................45
Section 3.15. Late Charges; Prepayment Fees or Other Charges..........45
Section 3.16. Maintenance of Standard Hazard Insurance,
Primary Mortgage Insurance, and Errors and
Omissions Coverage......................................45
ARTICLE IV
REMITTANCE AND REPORTING TO CERTIFICATEHOLDERS
Section 4.01. Remittance Reports......................................48
Section 4.02. Distribution Account....................................49
Section 4.03. Allocation of Available
Distribution Amount.....................................49
Section 4.04. Compliance with Withholding Requirements................50
Section 4.05. Reports of Security Principal
Balances to the Clearing Agency.........................50
<PAGE>
Page
Section 4.06. Preparation of Regulatory Reports.......................51
ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES
Section 5.01. Pooling REMIC Interests.................................52
Section 5.02. The Certificates........................................52
Section 5.03. Book-Entry Certificates.................................52
Section 5.04. Registration of Transfer and Exchange of Certificates...53
Section 5.05. Restrictions on Transfer................................54
Section 5.06. Accrual of Interest on the Certificates.................55
Section 5.07. Mutilated, Destroyed, Lost or Stolen Certificates.......55
Section 5.08. Persons Deemed Owners...................................56
Section 5.09. Appointment of Paying Agent.............................56
ARTICLE VI
THE COMPANY AND THE SERVICER
Section 6.01. Liability of the Company and the Servicer...............56
Section 6.02. The Company's Representations and Warranties............56
Section 6.03. Representations, Warranties and
Covenants of the Servicer...............................58
Section 6.04. Corporate Existence.....................................59
Section 6.05. Limitation on Liability of the
Company, the Servicer and Others........................59
Section 6.06. Servicer Resignation....................................60
Section 6.07. Assignment or Delegation of Duties
by the Servicer and the Company.........................60
Section 6.08. The Company and Servicer May Own Certificates...........60
Section 6.09. Protection of Trust Estate..............................60
Section 6.10. Performance of Obligations..............................61
ARTICLE VII
EVENT OF DEFAULT; TERMINATION OF SERVICING ARRANGEMENTS
Section 7.01. Events of Default.......................................61
Section 7.02. Trustee to Act; Appointment of Successor................62
Section 7.03. Notifications to Servicer and to Certificateholders.....64
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.......................................64
Section 8.02. Certain Matters Affecting the Trustee...................65
Section 8.03. Trustee Not Liable for Certificates or Assets...........67
Section 8.04. Trustee May Own Certificates............................67
Section 8.05. Trustee's Fees and Expenses.............................67
Section 8.06. Eligibility Requirements for Trustee....................68
(ii)
<PAGE>
Page
Section 8.07. Resignation and Removal of the Trustee..................68
Section 8.08. Successor Trustee.......................................68
Section 8.09. Merger or Consolidation of Trustee......................69
Section 8.10. Appointment of Co-Trustee or Separate Trustee...........69
Section 8.11. Appointment of Custodians...............................70
Section 8.12. Trustee May Enforce Claims Without
Possession of Certificates..............................70
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Repurchase or Liquidation of All
Contracts...............................................71
Section 9.02. Additional Termination Requirements.....................72
ARTICLE X
REMIC TAX PROVISIONS
Section 10.01. REMIC Administration....................................73
Section 10.02. Prohibited Activities...................................74
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendments..............................................76
Section 11.02. Recordation of Agreement; Counterparts..................76
Section 11.03. Limitation on Rights of Certificateholders..............77
Section 11.04. Notices.................................................77
Section 11.05. Severability of Provisions..............................78
Section 11.06. Sale of Contracts.......................................78
Section 11.07. Notice to Rating Agency.................................78
(iii)
<PAGE>
Page
TABLE OF EXHIBITS
Exhibit 1 Form of Servicer Custodial Certification
Exhibit 2-A Form of Initial Certification
Exhibit 2-B Form of Final Certification
Exhibit 3 Form of Recordation Report
Exhibit 4 Form of Request for Release
Exhibit 5 Form of Rule 144A Agreement
Exhibit 6 Form of Transferee Agreement
Exhibit 7 Form of Benefit Plan Affidavit
Exhibit 8 Form of Residual Transferee Agreement
Exhibit 9 Form of Power of Attorney
Standard Terms to Pooling and Servicing Agreement June 1997
(iv)
<PAGE>
RECITALS
Deutsche Financial Capital Securitization LLC (the "Company"), Oakwood
Acceptance Corporation ("OAC") and a banking association or corporation as
trustee (the "Trustee") have entered into a Pooling and Servicing Agreement that
provides for the issuance of manufactured housing contract and/or mortgage
pass-through securities (the "Certificates") that in the aggregate evidence the
entire interest in a pool consisting of retail installment sales contracts for
units of manufactured housing (the "Contracts") and/or mortgage loans secured by
first liens on one- to four-family residential real properties (the "Mortgage
Loans," and, together with the Contracts, the "Assets") and other property owned
by the Trust (the "Trust") created by such Pooling and Servicing Agreement.
These Standard Terms are a part of, and are incorporated by reference into, such
Pooling and Servicing Agreement.
STANDARD PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in the Pooling and Servicing Agreement and
as hereinafter set forth, the Company, OAC and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Except as otherwise specified herein or in a Pooling and Servicing Agreement
or as the context may otherwise require, whenever used in these Standard Terms,
the following words and phrases shall have the meanings assigned to them in this
Article. Unless otherwise specified, all calculations described herein shall be
made on the basis of a 360-day year consisting of twelve 30-day months.
"Accrual Date": With respect to any Series or Class of Certificates, the
date upon which interest begins accruing on the Certificates of such Series or
Class, which shall be specified in the related Pooling and Servicing Agreement.
"Adjustable Rate Asset": An "adjustable rate" Contract or Mortgage Loan, the
Asset Rate of which is subject to periodic adjustment in accordance with the
terms of the Contract or the related Mortgage Note.
"Advance": Any Servicing Advance or P&I Advance.
"Affiliate": As to any specified Person, any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Application for Relief": As defined in Section 4.06 hereof.
"Asset": A Contract or Mortgage Loan.
-1-
<PAGE>
"Asset Documents": Collectively, Contract Documents and Mortgage Loan
Documents.
"Asset File": With respect to any Asset, the related Contract File or
Trustee Mortgage Loan File, as applicable.
"Asset Rate": As to any Asset, the related Contract Rate or Mortgage Rate,
as applicable.
"Asset Schedule": For any Series, the list or lists attached to the related
Pooling and Servicing Agreement consisting of the related Contract Schedule, if
any, and the related Mortgage Loan Schedule, if any.
"Assignment": A document effecting the transfer of all the rights of a
secured party under a Mortgage to a transferee, in recordable form for the
jurisdiction in which the related Mortgaged Property is located.
"Available Distribution Amount": For each Distribution Date for a Series of
Certificates, the amount on deposit in the related Distribution Account at the
commencement of business on such Distribution Date, less the amounts
distributable from the Distribution Account in accordance with clauses (1)
through (4) of Section 4.03(a) hereof.
"Basis Limit Amount": With respect to any Converted Loan purchased from a
REMIC, an amount equal to the REMIC's adjusted federal income tax basis in such
Converted Loan as of the date on which the purchase occurs as set forth in a
certificate of an Officer of the Servicer, which certificate shall be delivered
to the Trustee in connection with any purchase of a Converted Loan from a REMIC.
"Beneficial Owner": With respect to a Book-Entry Certificate, the Person who
is registered as owner of that Certificate in the books of the Clearing Agency
for that Certificate or in the books of a Person maintaining an account with
such Clearing Agency.
"Benefit Plan Affidavit": An affidavit substantially in the form of Exhibit
7 hereto.
"Benefit Plan Opinion": An Opinion of Counsel to the effect that a proposed
transfer of a Certificate will not (a) cause any of the assets of the Trust to
be regarded as "plan assets" for purposes of the Plan Asset Regulations, (b)
give rise to any fiduciary duty under ERISA on the part of the Company, the
Servicer, the Trustee or the Trust's Tax Matters Person, if any, or (c) be
treated as, or result in, a "prohibited transaction" under section 406 or
section 407 of ERISA or under section 4975 of the Code. The cost of obtaining a
Benefit Plan Opinion shall not be borne by the Company, the Servicer or the
Trustee.
"Board of Directors": The Board of Directors of the Manager, OAC or any
other Servicer or any committee of that Board duly authorized to act on behalf
of that Board with respect to any matters arising hereunder.
"Book-Entry Certificates": The Classes of Certificates of a Series, if any,
classified as such in the related Pooling and Servicing Agreement.
"Business Day": Any day that is not a Saturday, Sunday, holiday or other day
on which commercial banking institutions in the city and state in which the
Trustee's Corporate Trust Office is located are authorized or obligated by law
or executive order to be closed.
"Certificate Account": An account established pursuant to and described in
Section 3.06 hereof.
-2-
<PAGE>
The Certificate Account will be an asset of the Trust but not an asset of any
related REMIC. Solely for federal income tax purposes, the Servicer will be the
owner of the Certificate Account and, thus, any income earned by the Certificate
Account, or any amounts transferred by any related REMIC to the Certificate
Account, shall be treated as income earned by, or amounts distributed to, the
Servicer.
"Certificate Principal Balance": With respect to each Certificate or Class
of Certificates, on any date of determination, the outstanding principal amount,
if any, of such Certificate(s) immediately prior to the most recently preceding
Distribution Date (or in the case of a date of determination on or before the
first Distribution Date, an amount equal to the initial principal amount of such
Certificate(s) as of the Closing Date) net of the amounts, if any, applied on
such preceding Distribution Date to reduce the principal amount of such
Certificate(s) in accordance with Section 4.03 hereof.
"Certificate Register" and "Certificate Registrar": The respective meanings
specified for such terms in Section 5.04 hereof.
"Certificateholder" or "Holder": With respect to any Certificate, the Person
in whose name such Certificate is registered in the Certificate Register.
"Certificates": The certificates authorized by, executed and delivered
under, and issued pursuant to any Pooling and Servicing Agreement.
"Class": With respect to any Series, the classification of different types
of the Certificates within such Series as set forth in the related Pooling and
Servicing Agreement.
"Clearing Agency": The Depository Trust Company, or any successor
organization or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
the regulations of the Securities and Exchange Commission thereunder.
"Clearing Agency Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date": With respect to any Series, the date specified as the
"Closing Date" in the related Pooling and Servicing Agreement.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Period": With respect to each Distribution Date for a Series,
the period commencing on the second day of the calendar month preceding the
month in which such Distribution Date occurs and ending at the close of business
on the first day of the calendar month in which such Distribution Date occurs.
"Commission": The Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, as amended.
-3-
<PAGE>
"Company" Deutsche Financial Capital Securitization LLC, a North Carolina
limited liability company wholly-owned by the Manager and DFC.
"Contract": Each retail installment sales contract and security agreement or
installment loan agreement and security agreement relating to the Contracts (1)
that has been executed by an Obligor and pursuant to which such Obligor (A)
purchased the Manufactured Home described therein, (B) agreed to pay the
deferred purchase price or amount borrowed, together with finance charges, as
therein provided in connection with such purchase or loan, (C) granted a
security interest in such Manufactured Home to the originator of such contract
and (D) undertook to perform certain other obligations as specified in such
contract or loan agreement and (2) that has been assigned to the Trustee
pursuant to the Pooling and Servicing Agreement.
"Contract Documents": With respect to each Contract:
(a) the original Contract;
(b) either (1) the original title document for the related
Manufactured Home, a duplicate certified by the appropriate
governmental authority that issued the original thereof or, if such
original is not yet available, a copy of the application filed with the
appropriate governmental authority pursuant to which the original title
document will issue (which copy may be on microfilm or optical disk
maintained by the Servicer in its records separate from the other
related Contract Documents), or (2) if the laws of the jurisdiction in
which the related Manufactured Home is located do not provide for the
issuance of title documents for manufactured housing units, other
evidence of ownership of the related Manufactured Home that is
customarily relied upon in such jurisdiction as evidence of title to a
manufactured housing unit;
(c) unless such Contract is a Land Secured Contract, evidence
of one or more of the following types of perfection of the Seller's or
the Trustee's security interest in the related Manufactured Home
granted by such Contract (or, if such evidence is not yet available, a
copy of the application or other filing used to obtain such security
interest (which copy may be on microfilm or optical disk maintained by
the Servicer in its records separate from the other related Contract
Documents)), as appropriate in the applicable jurisdiction: (1)
notation of such security interest on the title document, (2) a
financing statement meeting the requirements of the UCC, with evidence
of recording indicated thereon, (3) a fixture filing in accordance with
the UCC, with evidence of filing indicated thereon, or (4) such other
evidence of perfection of a security interest in a manufactured housing
unit as is customarily relied upon in the jurisdiction in which the
related Manufactured Home is located;
(d) an original assignment of the Contract from the initial
named payee thereunder to the Seller (unless the Seller is the initial
named payee for such Contract);
(e) originals of any assumption agreements relating to such
Contract, together with originals of any surety or guaranty agreement
relating to such Contract or to any such assumption agreement, payable
to the order of the Trustee, or, if not so payable, endorsed to the
order of, or assigned to, the Trustee by the holder/payee thereunder
without recourse;
(f) originals of any extension, modification or waiver
agreement(s) relating to such Contract; and
-4-
<PAGE>
(g) proof of maintenance of a Standard Hazard Insurance Policy
for the related Manufactured Home.
In the case of any Land Secured Contract, the related Contract Documents
shall consist of the following documents in lieu of those listed in clause (c)
of the foregoing paragraph: (i) the original recorded Mortgage for the related
Real Property, with evidence of recordation noted thereon or attached thereto,
or a certified copy thereof issued by the appropriate recording office (or, if
the Mortgage is in the process of being recorded, a photocopy of the Mortgage,
which may be on microfilm or optical disk maintained by the Servicer in its
records separate from the other related Contract Documents); (ii) if the
Mortgage does not name the related Seller as mortgagee therein or beneficiary
thereof, an original recorded assignment or assignments of the Mortgage from the
Persons named as mortgagee in, or beneficiary of, such Mortgage, to the related
Seller, with evidence of recordation noted thereon or attached thereto, or a
certified copy of each such assignment issued by the appropriate recording
office (or, if such an original assignment is in the process of being recorded,
a photocopy of each such assignment, which may be on microfilm or optical disk
maintained by the Servicer in its records separate from the other related
Contract Documents); (iii) a copy of the power of attorney delivered by the
Seller to the Trustee authorizing the Trustee to execute and record assignments
of Mortgages securing Land Secured Contracts from the Seller to the Trustee in
the event that recordation of such assignments becomes necessary for foreclosure
on the related Real Property by or on behalf of the Trustee; and (iv) if such
Land Secured Contract's original principal balance was $40,000 or greater, a
copy of the title search report and bring-down thereof (or evidence of title
insurance) with respect to the related Real Property.
"Contract File": With respect to any Contract, a file containing all of the
related Contract Documents.
"Contract Loan-to-Value Ratio": As to a Contract, the ratio, expressed as a
percentage, borne by the principal amount of such Contract at the time of
determination, to (a) where the Contract Loan-to-Value Ratio is being determined
as of origination, (1) the purchase price of the related Manufactured Home, plus
taxes, closing fees paid to third parties and insurance premiums (in the case of
a Contract secured by a new Manufactured Home) or (2) the lesser of (A) the
total delivered sales price of the related Manufactured Home or (B) the
appraised value of the related Manufactured Home (as set forth in the appraisal
obtained by the originator in connection with origination), plus taxes, closing
fees paid to third parties and insurance premiums (in the case of a Contract
secured by a used Manufactured Home) or (b) where the Contract Loan-to-Value
Ratio is being determined later than origination, the appraised value of the
related Manufactured Home as determined within six months of the date on which
the Contract Loan-to-Value Ratio is being determined by a professional appraiser
or an employee of the Servicer who, as part of his or her employment, regularly
appraises manufactured housing units.
"Contract Rate": With respect to a Contract, the annual interest rate
required to be paid by an Obligor under the terms of such Contract.
"Contract Schedule": For any Series, the list attached to the related
Pooling and Servicing Agreement identifying each Contract assigned thereunder
(which may be presented together with any related Mortgage Loan Schedule in a
single Asset Schedule), which list shall (a) identify each Contract and (b) set
forth (or describe the method of determining) as to each such Contract (1) the
Cut-off Date Principal Balance thereof, (2) the amount of each Monthly Payment
due from the Obligor thereunder, (3) the Contract Rate thereof, (4) the original
term to maturity thereof, (5) the date of origination thereof, (6) the original
Contract Loan-to-Value Ratio thereof, (7) the state in which the related
Manufactured Home is located, (8) whether the related Manufactured Home is a
used, repossessed, new or transferred home, (9) whether the Contract is a Land
Secured Contract and (10) any other information specified in the
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related Pooling and Servicing Agreement.
"Converted Loan": An Adjustable Rate Asset with respect to which the Obligor
has complied with the applicable requirements of the related Contract or
Mortgage Note to convert the related Asset Rate to a fixed rate of interest, and
as to which the Servicer has processed such conversion.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business under a
Pooling and Servicing Agreement shall be administered.
"Credit Insurer": An insurer under any Primary Mortgage Insurance Policy or
pool insurance policy for a Series.
"Custodian": For any Series, the Trustee or an agent of the trustee
identified in the related Pooling and Servicing Agreement, which agent shall
hold all or part of the Trustee Mortgage Loan Files for some or all of the
related Mortgage Loans.
"Cut-off Date": With respect to any Series, the date or dates (a) after
which all Monthly Payments due in respect of the Assets sold to the Trust (net
of Servicing Fees relating to such Assets) and (b) on and after which all
Principal Prepayments, Net Liquidation Proceeds and Repurchase Prices received
in respect of such Assets, are to be transmitted to the Certificate Account for
the benefit of the Holders of the Certificates. The Cut-off Date for a Series
shall be specified in the related Pooling and Servicing Agreement.
"Cut-off Date Principal Balance": As to any Asset, the original principal
amount of such Asset, minus the principal portion of all Monthly Payments due on
such Asset on or before the Cut-off Date and minus all other payments applied to
reduce such original principal amount before the Cut-off Date.
"Default": Any occurrence that is, or that with notice or the lapse of time
or both would become, an Event of Default.
"Defaulted Contract": A Contract (a) as to which any related Monthly Payment
has been delinquent and remains delinquent 90 days after the Due Date therefor
or (b) as to which the related Obligor has become bankrupt or insolvent.
"Defect Discovery Date": With respect to an Asset, the date on which either
the Trustee or the Servicer first discovers a Qualification Defect affecting the
Asset.
"DFC": Deutsche Financial Capital Limited Liability Company, a North
Carolina limited liability company and an Affiliate of the Company.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust, in each case other
than through an Independent Contractor; PROVIDED, HOWEVER, that the Servicer on
behalf of the Trustee shall not be considered to Directly Operate an REO
Property solely because the Servicer on behalf of the Trustee establishes rental
terms, chooses tenants, enters into or renews leases, deals with taxes and
insurance, or makes decisions as to repairs or capital expenditures with respect
to such REO Property.
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"Disqualified Organization": Either (a) the United States, (b) any state or
political subdivision thereof, (c) any foreign government, (d) any international
organization, (e) any agency or instrumentality of any of the foregoing, (f) any
organization (other than a cooperative described in section 521 of the Code)
that is exempt from federal income taxation (including taxation under the
unrelated business taxable income provisions of the Code), (g) any rural
telephone or electrical service cooperative described in section 1381(a)(2)(C)
of the Code, or (h) any other entity identified as a disqualified organization
by legislation enacted or administrative pronouncement in effect as of the date
of the most recent transfer of the related Residual Certificate. A corporation
will not be treated as an instrumentality of the United States or any state or
political subdivision thereof if all of its activities are subject to tax and,
with the exception of the Federal Home Loan Mortgage Corporation, a majority of
its board of directors is not selected by such governmental unit.
"Distribution Account": As defined in Section 4.02 hereof.
"Distribution Date": Unless otherwise specified in the Pooling and Servicing
Agreement, the 15th day of any month, or the next Business Day after such 15th
day if such 15th day is not a Business Day, commencing in the month following
the Closing Date and ending on the date on which the Trust is terminated.
"Due Date": With respect to any Asset, the date on which a Monthly Payment
is due on such Asset from the Obligor thereunder (without regard to any grace
period).
"Due Date Interest Shortfall": For any Asset that is prepaid in full or
liquidated on other than a Due Date for such Asset, the difference between (a)
the amount of interest that would have accrued on such Asset through the day
preceding the Due Date next following the date of such prepayment or liquidation
had the Asset not been prepaid in full or liquidated (net of any other
administrative fees payable out of such interest had it accrued and been paid)
and (b) the amount of interest that actually accrued on such Asset prior to the
prepayment in full or liquidation thereof (net of an allocable portion of any
other administrative fees payable from interest payments on such Asset in
respect of the related Collection Period).
"Early Payment": As to any Asset and any Due Date on which the principal and
interest payments on such Asset made with respect to such Due Date (not
including any late fees) exceed the sum of the scheduled Monthly Payment for
such Asset and Due Date plus any unpaid Monthly Payments for previous Due Dates,
if the related Obligor has not sent written notice to the Servicer with such
payment asking that the amount by which such payment exceeds the Monthly Payment
then due be treated as a Principal Prepayment and the Servicer is unable to
determine the Obligor's intended treatment of such excess payment, the Early
Payment shall be the amount by which (1) payments of principal and interest on
such Asset made with respect to such Due Date exceed (2) the scheduled Monthly
Payment for such Asset on such Due Date plus any unpaid Monthly Payments for
previous Due Dates, but only to the extent that the amount of such excess is an
integral multiple of the amount of the scheduled Monthly Payment for such Due
Date. To the extent that the amount of such excess exceeds an integral multiple
of such scheduled Monthly Payment, the excess shall be deemed to be a Principal
Prepayment of such Asset.
"Eligible Account": (1) An account or accounts maintained with a Qualified
Bank, (2) any trust account maintained in the corporate trust department of a
financial institution subject to governmental regulatory authorities or (3) a
non-trust account maintained with the Trustee, so long as the Trustee's
commercial paper or short-term unsecured debt obligations are rated by each
Rating Agency in its highest applicable rating category (without regard to
"plus" or "minus" modifiers of such rating
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category); PROVIDED that the Servicer shall move any funds in such account to
another account which is an Eligible Account pursuant to clause (1) or (2) of
this definition within five days after any downgrading of the Trustee's
commercial paper or short-term unsecured debt obligations below each Rating
Agency's highest applicable rating category (without regard to "plus" or "minus"
modifiers of such rating category) and shall not deposit funds into any account
that is an Eligible Account pursuant to this clause (3) if such deposit would
cause the amount on deposit in such account to exceed 20% of the aggregate
unpaid principal balance of the Certificates. Eligible Accounts may bear
interest.
"Eligible Investments": Any one or more of the following obligations or
securities:
(a) direct obligations of, and obligations fully guaranteed
by, the United States of America;
(b) demand and time deposits in, negotiable certificates of
deposit of, bankers' acceptances issued by, or federal funds sold by,
any Qualified Bank;
(c) commercial paper of any Person other than the Company, the
Seller or any Affiliate of the Company or the Seller rated in the
Rating Agency's highest applicable rating category;
(d) repurchase agreements fully collateralized by possession
of obligations of the type specified in clause (a) above; PROVIDED,
HOWEVER, that investments in such repurchase agreements shall mature
within three days of the acquisition thereof and; PROVIDED FURTHER,
that such agreements shall be entered into with a Qualified Bank;
(e) money market accounts or money market funds rated in one
of the three highest rating categories of the Rating Agency for money
market funds; or
(f) money market accounts or money market mutual funds
investing primarily in obligations of the United States government, and
further investing exclusively in debt obligations, PROVIDED, HOWEVER,
that such money market accounts or money market mutual funds shall be
rated in a rating category sufficient to support the initial ratings
assigned to a related Series of Certificates.
The foregoing notwithstanding, Eligible Investments that are acquired with funds
in the Certificate Account, the Distribution Account or any Reserve Fund shall
include only such obligations or securities that mature on or before the
Business Day immediately preceding the next Distribution Date. The Trustee may
not sell or convert an Eligible Investment if such sale or conversion would
result in a loss on the investment. In no event shall an instrument be an
Eligible Investment if such instrument evidences (1) a right to receive only
interest payments with respect to the obligations underlying such instrument or
(2) both principal and interest payments derived from obligations underlying
such instrument, if the interest and principal payments with respect to such
instrument provide a yield to maturity at the date of investment of greater than
120% of the yield to maturity at par of such underlying obligations.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"ERISA Restricted Certificates": With respect to any Series, any
Certificates of a Class that are subordinated to the Certificates of any other
Class of such Series with respect to the allocation of
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Writedown Amounts, or, if the related Pooling and Servicing Agreement does not
provide for the allocation of Writedown Amounts, the Certificates designated as
"ERISA Restricted Certificates" in the related Pooling and Servicing Agreement.
"Event of Default": As defined in Section 7.01 hereof.
"FHA": The Federal Housing Administration.
"FHA Asset": An Asset that is insured by the FHA.
"FHA Insurance": As to any FHA Asset, FHA's agreement to reimburse the owner
of such Asset for the amount of any losses incurred upon the liquidation of such
Asset.
"FHLMC": Federal Home Loan Mortgage Corporation.
"Final Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 2-B hereto
provided by the Trustee (or the Custodian) on or before the first anniversary of
the Closing Date pursuant to Section 2.03(c)(2) hereof.
"Final Scheduled Distribution Date": With respect to any Class of any
Series, the date specified as such in the related Pooling and Servicing
Agreement.
"FNMA": Federal National Mortgage Association.
"Fraud Loss": A loss incurred on a Contract or Mortgage Loan resulting from
a Credit Insurer's failure to pay a claim with respect to such Contract or
Mortgage Loan on the grounds of fraud in connection with the origination of the
Contract or Mortgage Loan or on the grounds of fraud, dishonesty or
misrepresentation in connection with the application for any insurance obtained
with respect to such Contract or Mortgage Loan.
"Independent": When used with respect to any specified Person, another
Person who (a) is in fact independent of the Company, the Seller, the Servicer,
any obligor upon the Certificates or any Affiliate of the Company, the Seller or
the Servicer or such obligor, (b) does not have any direct financial interest or
any material indirect financial interest in the Company, the Seller or the
Servicer or in any such obligor or in an Affiliate of the Company, the Seller or
the Servicer or such obligor, and (c) is not connected with the Company, the
Seller or the Servicer or any such obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is provided herein that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such Person shall be appointed by
the Company, the Seller or the Servicer in the exercise of reasonable care by
the Company, the Seller or the Servicer, as the case may be, and approved by the
Trustee, and such opinion or certificate shall state that the Person executing
the same has read this definition and that such Person is independent within the
meaning thereof.
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"Independent Contractor": Either (a) any Person (other than the Servicer)
that would be an "independent contractor" with respect to the Trust within the
meaning of Section 856(d)(3) of the Code if the Trust were a real estate
investment trust (except that, in applying that Section, more than 35% of the
outstanding principal balance of any Class shall be deemed to be more than 35%
of the certificates of beneficial interest of the Trust), so long as the Trust
does not receive or derive any income from such Person, the relationship between
such Person and the Trust is at arm's length and such Person is not an employee
of the REMIC, the Trustee or the Servicer, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (b) any other Person (including the
Servicer) upon receipt by the Trustee of an Opinion of Counsel, the expense of
which shall constitute a Servicing Advance if borne by the Servicer, to the
effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Initial Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 2-A hereto
provided by the Trustee (or the Custodian) on the Closing Date pursuant to
Section 2.03(c)(1) hereof.
"Initial Value": As defined in Section 3.16(b) hereof.
"Insurance Policy": Any insurance policy covering any Asset (or the related
Manufactured Home or Mortgaged Property), including, without limitation, any
Standard Hazard Insurance Policy or Primary Mortgage Insurance Policy or FHA
Insurance or VA Guaranty.
"Insurance Proceeds": Amounts paid or payable (as the context requires)
under any Insurance Policy, to the extent such amounts are not applied to the
restoration or repair of the Manufactured Home or Mortgaged Property in respect
of which such amounts were paid.
"Insured Expenses": Expenses incurred by the Servicer in connection with a
Contract or Mortgage Loan under which the Obligor is in default, which expenses
are covered by a Standard Hazard Insurance Policy and are paid by an insurer
under any such policy.
"Interest Accrual Period": With respect to each Distribution Date (i) for
any Class of Certificates paying interest at a variable rate, the period
commencing on the 15th day of the preceding month through the 14th day of the
month in which such Distribution Date occurs (except that the first Interest
Accrual Period for such Class of Certificates will be the period from the
related Closing Date through the 14th day of the month in which such
Distribution Date occurs) and (ii) for all other Classes of Certificate, the
calendar month preceding the month in which the Distribution Date occurs.
Interest on any Class of Certificates paying interest at a variable rate will be
calculated on the basis of a 360-day year and the actual number of days elapsed
in the applicable Interest Accrual Period. Interest on all other Classes of
Certificates will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Issuing REMIC": If provided for in a Pooling and Servicing Agreement, the
REMIC composed primarily of Regular Interests in the Pooling REMIC, together
with the Distribution Account.
"Land Secured Contract": A Contract secured at origination by a parcel of
real estate in addition to a Manufactured Home.
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"Liquidated Loan": A Defaulted Contract or defaulted Mortgage Loan as to
which all amounts that the Servicer expects to recover through the date of
disposition of the related Manufactured Home or Mortgaged Property have been
received.
"Liquidation Expenses": All reasonable, out-of-pocket costs and expenses
(exclusive of the Servicer's overhead costs) incurred by the Servicer in
connection with liquidation of any Asset or disposition of any related Repo
Property or REO Property, including, but not limited to, the cost of all notices
sent in connection with such liquidation, costs and expenses incurred in
connection with preparation and recordation of assignments of Mortgages relating
to Land Secured Contracts, expenses, including reasonable attorney's fees,
incurred in connection with the commencement and pursuit of Proceedings against
Obligors or guarantors or sureties of Obligors or in the pursuit of foreclosure
or other similar remedies, expenses incurred in repossessing and refurbishing
the related Manufactured Home or preparing the related REO Property for sale and
sales commissions paid in connection with the resale of the related Manufactured
Home or REO Property.
"Liquidation Proceeds": Amounts received and retained in connection with the
liquidation of Liquidated Loans, whether through foreclosure thereon or
repossession and resale of the related Manufactured Home, foreclosure on the
related Mortgaged Property or otherwise (including Insurance Proceeds collected
in connection with such liquidation).
"Loan-to-Value Ratio": The Contract Loan-to-Value Ratio or the Mortgage
Loan-to-Value Ratio of an Asset, as applicable.
"Manager": Deutsche Financial Capital I Corp., a North Carolina corporation
and an Affiliate of the Company, in its capacity as the Company's manager.
"Manufactured Home": A unit of manufactured housing (within the meaning of
Code section 25(e)(10)) together with all accessions thereto securing the
indebtedness of the Obligor under any Contract or constituting a portion of the
Mortgaged Property securing the indebtedness of the Obligor under any Mortgage
Loan.
"Monthly Payment": With respect to any Asset, the scheduled monthly payment
of principal and interest thereon due in any month under the terms thereof.
"Mortgage": A written instrument creating a valid first lien on Real
Property or a Mortgaged Property, in the form of a mortgage, deed of trust, deed
to secure debt or security deed, including any riders or addenda thereto.
"Mortgage Insurer": The insurance company or companies which issue any
Primary Mortgage Insurance Policies with respect to any Mortgage Loans.
"Mortgage Loan": A mortgage loan (not including any Land Secured Contract)
secured by a first lien on a one- to four-family residential real property
(which may be the real estate to which a Manufactured Home is deemed by the
Seller to have become permanently affixed as of the Cut-off Date for the related
Series).
"Mortgage Loan Documents": With respect to each Mortgage Loan, the following
documents:
(a) the original Mortgage Note bearing a complete chain of
endorsements, if necessary, from the initial payee thereunder to the
Seller, with a further endorsement without
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recourse from the Seller in blank or to the Trustee or its Custodian,
in a form specified in the related Sales Agreement, together with all
related riders and addenda and any related surety or guaranty
agreement, power of attorney and buydown agreement;
(b) the original recorded Mortgage (or a copy thereof
certified to be a true and correct reproduction of the original thereof
by the appropriate public recording office) with evidence of
recordation noted thereon or attached thereto, or, if the Mortgage is
in the process of being recorded, a photocopy of the Mortgage,
certified by an officer of the related Seller or the originator, the
related title insurance company, the related closing/settlement/escrow
agent or the related closing attorney to be a true and correct copy of
the Mortgage submitted for recordation;
(c) the original recorded assignment of the Mortgage from the
related Seller to the Trustee or its Custodian, in a form specified in
the related Sales Agreement (or a copy thereof certified to be a true
and correct reproduction of the original thereof by the appropriate
public recording office) with evidence of recordation noted thereon or
attached thereto, or, if the assignment is in the process of being
recorded, a photocopy of the assignment, certified by an officer of the
Seller to be a true and correct copy of the assignment submitted for
recordation;
(d) each original recorded intervening assignment of the
Mortgage as is necessary to show a complete chain of title from the
initial mortgagee (or beneficiary, in the case of a deed of trust) to
the related Seller (or a copy of each such assignment certified to be a
true and correct reproduction of the original thereof by the
appropriate public recording office) with evidence of recordation noted
thereon or attached thereto, or, if an assignment is in the process of
being recorded, a photocopy of the assignment, certified by an officer
of the Seller to be a true and correct copy of the assignment submitted
for recordation;
(e) an original Title Insurance Policy or, if such policy has
not yet been issued or is otherwise not available, (1) a written
commitment to issue such policy issued by the applicable title
insurance company and an officer's certificate of the related Seller
certifying that all of the requirements specified in such commitment
have been satisfied, (2) a preliminary title report if the related
Mortgaged Property is located in a state in which preliminary title
reports are acceptable evidence of title insurance or (3) a certificate
of an officer of the Seller certifying that a Title Insurance Policy is
in full force and effect as to the related Mortgage and that such Title
Insurance Policy is freely assignable to and will inure to the benefit
of the Trustee (subject to recordation of the related Assignment of
Mortgage);
(f) for each Mortgage Loan identified in the related Agreement
as having in place a Primary Mortgage Insurance Policy, a Primary
Mortgage Insurance Policy or a certificate of primary mortgage
insurance issued by the related Mortgage Insurer or its agent
indicating that such a policy is in effect as to such Mortgage Loan or,
if neither a policy nor a certificate of insurance from the related
Mortgage Insurer is available, a certificate of an officer of the
related Seller certifying that a Primary Mortgage Insurance Policy is
in effect as to such Mortgage Loan;
(g) each related assumption agreement, modification, written
assurance or substitution agreement, if any; and
(h) proof of the maintenance of a Standard Hazard Insurance
Policy (and a flood insurance policy, if applicable) as to the related
Mortgaged Property.
"Mortgage Loan-to-Value Ratio": As to a Mortgage Loan, the ratio, expressed
as a percentage,
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borne by the principal amount of such Mortgage Loan at the time of
determination, to (a) the lesser of (1) the sales price of the related Mortgaged
Property (in the case of a purchase money mortgage loan where the Mortgage
Loan-to-Value Ratio is being determined as of origination), or (2) the appraised
value of the related Mortgaged Property, as shown in the appraisal prepared in
connection with the origination of such Mortgage Loan or (b) the appraised value
of the related Mortgaged Property, as shown in an appraisal made within six
months of the date of determination of the Mortgage Loan-to-Value Ratio, where
the Mortgage Loan-to-Value Ratio is being determined later than origination.
"Mortgage Loan Schedule": For any Series, the list attached to the related
Pooling and Servicing Agreement identifying each Mortgage Loan assigned
thereunder (which may be presented together with any related Contract Schedule
in a single Asset Schedule), which list shall (a) identify each Mortgage Loan
and (b) set forth (or describe the method of determining) as to each such
Mortgage loan (1) the Cut-off Date Principal Balance thereof, (2) the amount of
each Monthly Payment, (3) the Mortgage Rate thereof, (4) the original term to
maturity thereof, (5) the date of origination thereof, (6) the original Mortgage
Loan-to-Value Ratio thereof, (7) the state in which the related Mortgaged
Property is located, and (8) any other information as may be reasonably
requested by the Trustee prior to the Closing Date.
"Mortgage Note": A manually executed written instrument evidencing a
Mortgagor's promise to repay a stated sum of money, plus interest, to the holder
of such instrument on or before a specific date according to a schedule of
principal and interest payments.
"Mortgage Rate": With respect to each Mortgage Loan,
the interest rate specified in the related Mortgage Note.
"Mortgaged Property": The mortgaged property securing a Mortgage Loan.
"Mortgagor": The obligor on a Mortgage Note.
"Net Insurance Proceeds": With respect to any Asset, Insurance Proceeds
received with respect thereto net of (a) any Insured Expenses incurred in
connection therewith, (b) all reasonable out-of-pocket expenses incurred by the
Servicer in connection with the collection of such Insurance Proceeds and (c)
the amount of any Advances made by the Servicer or any other entity with respect
to such Asset and not previously reimbursed to the Servicer or such other entity
as of the time of the Servicer's receipt of such Insurance Proceeds. Amounts
received by the Servicer as Net Insurance Proceeds will be treated for
accounting purposes as payments received on Assets.
"Net Liquidation Proceeds": With respect to any Asset, the amount of
Liquidation Proceeds received with respect thereto (including any Net Insurance
Proceeds recovered in connection with the liquidation of the related
Manufactured Home or Mortgaged Property) net of the amount of any Liquidation
Expenses incurred and not previously reimbursed to the Servicer or such other
entity as of the time of the liquidation of such Asset. Amounts received by the
Servicer as Net Liquidation Proceeds will be treated for accounting purposes as
payments received on Assets.
"Net Rate": As to any Asset, the applicable Asset Rate minus the Servicing
Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of the Trust,
including any lease renewed, modified or extended on behalf of the Trust (if the
Trustee, or the Servicer or its agent, has the right to renegotiate the terms of
such lease).
"Non-Recoverable Advance": As to any Advance that has not yet been made,
any portion of the amount of such prospective Advance which the Servicer
reasonably determines would not ultimately be
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recoverable from Related Proceeds. As to any Advance that has been made by the
Servicer, any portion of the amount of such Advance that has subsequently been
determined by the Servicer to be not ultimately recoverable from Related
Proceeds. In determining whether an Advance is or would be a Non-Recoverable
Advance, the Servicer need not take into account the possibility that it might
recover any amounts as the result of a deficiency judgment against the related
Obligor.
"Non-U.S. Person": A foreign person within the meaning of Treasury
regulation Section 1.860G-3(a)(1) (I.E., a person other than (a) a citizen or
resident of the United States, (b) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, (c) an estate that is subject to United States federal income tax
regardless of the source of its income), or (d) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States fiduciaries has the authority to control
all substantial decisions of the trust who would be subject to United States
income tax withholding pursuant to section 1441 or 1442 of the Code on income
derived from a Residual Interest.
"OAC": Oakwood Acceptance Corporation, a North Carolina corporation.
"Obligor": The obligor under a Contract.
"Obligor Bankruptcy Loss": With respect to any Distribution Date as to any
Asset that was the subject of a Principal Cramdown during the preceding
Prepayment Period, the related Principal Cramdown Amount.
"Officer": With respect to any corporation, the Chairman of the Board of
Directors, the President, any Vice President or Assistant Vice President, the
Secretary, the Treasurer, or any Assistant Secretary or Assistant Treasurer of
such corporation (or, in the case of the Trustee, any trust officer thereof);
with respect to the Company, any Officer of the Manager; with respect to any
partnership, the designated managing partner, if any, who has been granted
authority by the partnership agreement of such partnership to bind the
partnership by his or her signature, or, in any other case, any general partner
of the partnership; with respect to any bank or trust company acting as trustee
of an express trust or as custodian, any trust officer or authorized officer
thereof.
"Officer's Certificate": For any Person, a certificate that has been signed
on behalf of that Person by an Officer of that Person or any other individual
authorized to execute the certificate.
"Opinion of Counsel": A written opinion of counsel, which counsel is
satisfactory to the Servicer and the Trustee. Whenever an Opinion of Counsel is
required hereunder, the renderer of such Opinion may rely on other Opinions of
Counsel. Any Opinion of Counsel relating to tax matters must be an opinion of
Independent counsel.
"Outstanding": (a) With respect to the Certificates, as of any date of
determination, "Outstanding" refers to all Certificates theretofore executed and
delivered under the Pooling and Servicing Agreement except:
(1) Certificates theretofore canceled by the Certificate
Registrar or delivered to the Certificate Registrar for cancellation;
(2) Certificates or portions thereof for which money in the
amount necessary for the making of a final distribution on such
Certificates has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Certificates; PROVIDED,
that if such
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Certificates are to be retired because of termination of the Trust at
the option of the Servicer, notice of such optional termination has
been duly given pursuant to the Pooling and Servicing Agreement;
(3) Certificates in exchange for which other Certificates have
been executed and delivered pursuant to Section 5.04 hereof; and
(4) Certificates alleged to have been destroyed, lost or
stolen for which replacement Certificates have been issued pursuant to
Section 5.07 hereof unless proof satisfactory to the Trustee has been
presented at or before the time that the determination of those
Certificates that are Outstanding is made that any such Certificates
are held by a holder in due course.
(b) With respect to the Assets as of any date, "Outstanding" refers to
Assets with unpaid principal balances greater than zero and that have not
previously been purchased or repurchased pursuant to Section 2.06 hereof or
become Liquidated Loans.
"Outstanding Certificate Writedown Amount": With respect to any Class of
Certificates, the aggregate amount of all Writedown Amounts that have been
allocated to such Class since the Closing Date for the related Series, minus any
amounts that have been distributed on such Class in reduction of such aggregate
amount in accordance with the related Pooling and Servicing Agreement.
"P&I Advance": As defined in Section 3.04(b) hereof.
"Pass-Through Rate": With respect to any Class of Certificates, the annual
rate at which interest accrues on the Certificates of such Class, which rate is
specified or described for each Class in the related Pooling and Servicing
Agreement.
"Paying Agent": Any Person authorized by the Company and the Trustee to
distribute principal or interest on any Certificates on behalf of the Trustee
and appointed pursuant to Section 5.09 hereof.
"Percentage Interest": With respect to a Certificate to which an initial
principal amount is assigned as of the Closing Date, the portion of the Class of
which such Certificate is a part evidenced by such Certificate, expressed as a
percentage, the numerator of which is the denomination represented by such
Certificate and the denominator of which is the initial Certificate Principal
Balance of such Class. With respect to a Certificate to which an initial
principal balance is not assigned as of the Closing Date, the portion of the
Class of which such Certificate is a part evidenced by such Certificate,
expressed as a percentage stated on the face of such Certificate.
"Permitted Encumbrances": In respect of any Mortgaged Property or Real
Property:
(a) the lien of current real property taxes and assessments
not yet due and payable;
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(b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of
recording acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the related originator and referred to or otherwise
considered in the appraisal made for the originator; and
(c) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment,
value or marketability of the related Mortgaged Property or Real
Property.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Plan": Any employee benefit plan or retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds in which such plans, accounts, annuities or arrangements are
invested, that are described in or subject to the Plan Asset Regulations, ERISA
or corresponding provisions of the Code.
"Plan Asset Regulations": The Department of Labor regulations set forth in
29 C.F.R. s.s. 2510.3-101.
"Plan Investor": A Plan, a Person acting on behalf of a Plan or a Person
using the assets of a Plan.
"Pool Scheduled Principal Balance": For any Series, on any Distribution
Date, the aggregate of the Scheduled Principal Balances, immediately prior to
the beginning of the related Collection Period, of the related Assets that were
Outstanding at the beginning of such Collection Period, without giving effect to
any Principal Prepayments, Net Liquidation Proceeds or Repurchase Prices
received (or Realized Losses incurred) on the day preceding the beginning of
such Collection Period, plus the aggregate of the principal components of any
Monthly Payments that were due at or prior to the beginning of such Collection
Period on such Assets, but which Monthly Payments were not collected from a
related Obligor or advanced by the Servicer and which were not reflected in a
corresponding reduction in the aggregate Certificate Principal Balance of the
related Certificates on the related Distribution Date. The Pool Scheduled
Principal Balance as of any date of determination that is not a Distribution
Date shall be the Pool Scheduled Principal Balance for the next upcoming
Distribution Date.
"Pooling and Servicing Agreement": A Pooling and Servicing Agreement among
the Company, OAC and a Trustee, relating to the issuance of Certificates of a
Series, which shall incorporate these Standard Terms by reference.
"Pooling REMIC": If provided for in a Pooling and Servicing Agreement, the
REMIC consisting primarily of the related Assets.
"Pooling REMIC Regular Interest": A Regular Interest in a Pooling REMIC.
"Prepayment Period": With respect to each Distribution Date, the calendar
month immediately preceding the calendar month in which such Distribution Date
occurs.
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"Primary Mortgage Insurance": The insurance provided under any Primary
Mortgage Insurance Policy.
"Primary Mortgage Insurance Policy": A primary mortgage insurance policy, if
applicable, covering certain conventional Mortgage Loans for which the initial
Mortgage Loan-to-Value Ratios exceeded 80%.
"Principal Cramdown" means, as to any Asset, either (a) a decree by a
bankruptcy court to the effect that the portion of such Asset that is secured by
the underlying Manufactured Home or Mortgaged Property is less than its Unpaid
Principal Balance due to the fact that the value of such Manufactured Home or
Mortgaged Property is less than such Unpaid Principal Balance or (b) the
permanent forgiveness by a bankruptcy court of some or all of the Unpaid
Principal Balance owed by the related Obligor.
"Principal Cramdown Amount" means, with respect to any Prepayment Period as
to any Asset that has been the subject of a Principal Cramdown, the amount by
which (a) the Unpaid Principal Balance of such Asset exceeds (b) as applicable,
depending upon the type of Principal Cramdown that was applied to such Asset,
either (1) the portion of such Unpaid Principal Balance that remains secured by
the related Manufactured Home or Mortgaged Property after taking the related
Principal Cramdown into account or (2) the Unpaid Principal Balance after taking
into account the permanent forgiveness of debt ordered by the bankruptcy court
in connection with the related Principal Cramdown.
"Principal Prepayment": With respect to any Asset, a payment attributable to
principal of such Asset, other than a scheduled principal payment on such Asset,
which may be received (a) from the related Obligor together with a regular
Monthly Payment, (b) from the related Obligor together with an Early Payment, or
(c) in the form of Net Insurance Proceeds received by the Servicer otherwise
than as a component of Liquidation Proceeds.
"Private Certificate": Any Class of Certificates of a Series designated as
such in the related Pooling and Servicing Agreement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Qualification Defect": With respect to an Asset, (a) a defective document
in the related Asset File, (b) the absence of a document in such Asset File, or
(c) the breach of any representation, warranty, or covenant with respect to the
Asset made by the Company, the Seller or the Servicer, but only if, as a result
of any of the foregoing, the affected Asset would cease to qualify as a
"qualified mortgage" for purposes of the REMIC Provisions. With respect to a
REMIC Regular Interest or a participation certificate described in Code section
860G(a)(3), the failure to qualify as a "qualified mortgage" for purposes of the
REMIC Provisions.
"Qualified Bank": Any domestic bank not affiliated with the Seller or the
Company (1) having long-term unsecured debt obligations rated in one of the two
highest rating categories (without modifiers) of at least one Rating Agency (and
of any other Rating Agency, if such bank's long-term unsecured debt obligations
are rated by such additional Rating Agency) or short-term unsecured debt
obligations rated in at least one Rating Agency's highest applicable rating
category (and of any other Rating Agency's highest applicable rating category if
such bank's short-term unsecured debt obligations are rated by such additional
Rating Agency), (2) having commercial paper or short-term unsecured debt
obligations rated in at least one Rating Agency's highest applicable rating
category (and in any other Rating Agency's highest applicable rating category if
such bank's commercial paper or short-term
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unsecured debt obligations are rated by such additional Rating Agency), or (3)
that is otherwise acceptable to each applicable Rating Agency.
"Qualified Institutional Buyer": Any "qualified institutional buyer" as
defined in clause (a)(1) of Rule 144A.
"Qualified Insurer": Any insurance company or surety or bonding company
licensed to do business and issue insurance in all relevant jurisdictions
(including, in the case of an insurer under a Standard Hazard Insurance Policy,
the jurisdiction in which each Manufactured Home or Real Property or Mortgaged
Property covered by such policy is located).
"Qualified Substitute Asset": An Asset substituted by the Company or the
Seller for a Replaced Asset which must, on the date of such substitution, (a)
have an Unpaid Principal Balance not greater than (and not more than $10,000
less than) the Unpaid Principal Balance of the Replaced Asset, (b) have an Asset
Rate not less than (and not more than one percentage point in excess of) the
Asset Rate of the Replaced Asset, (c) have a Net Rate equal to the Net Rate of
the Replaced Asset, (d) have a remaining term to maturity not greater than (and
not more than one year less than) that of the Replaced Asset, (e) have a
Loan-to-Value Ratio as of the first day of the month in which the substitution
occurs equal to or less than the Loan-to-Value Ratio of the Replaced Asset as of
such date (in each case, using the appraised value at origination, and after
taking into account the Monthly Payment due on such date), and (f) comply with
each representation and warranty set forth in Section 2.05 hereof and in the
related Sales Agreement. In the event that more than one Asset is substituted
for a Replaced Asset, the amount described in clause (a) hereof shall be
determined on the basis of aggregate Unpaid Principal Balances, the rates
described in clauses (c) (i), (ii), and (iii) hereof shall be determined on the
basis of weighted average Asset Rates and Net Rates, as the case may be, and the
term described in clause (d) hereof shall be determined on the basis of weighted
average remaining terms to maturity, provided that no Qualified Substitute Asset
may have an original term to maturity beyond the latest original term to
maturity of any Asset assigned to the Trust on the Closing Date. In the case of
a Trust for which a REMIC election has been or will be made, a Qualified
Substitute Asset also shall satisfy the following criteria as of the date of its
substitution for a Replaced Asset: (A) the Obligor shall not be 90 or more days
delinquent in payment on the Qualified Substitute Asset, (B) the Asset File for
such Asset shall not contain any material deficiencies in documentation, and
shall include an executed Contract or Mortgage Note, as applicable, and, if it
is a Land Secured Contract or a Mortgage Loan, a recorded Mortgage; (C) the
Loan-to-Value Ratio of the Asset must be 125% or less either (1) on the date of
origination of the Asset, or, if any of the terms of such Asset were modified
other than in connection with a default or imminent default on such Asset, on
the date of such modification, or (2) on the date of the substitution, based on
an appraisal conducted within the 60 day period prior to the date of the
substitution; (D) no property securing such Asset may be subject to foreclosure,
bankruptcy, or insolvency proceedings; and (E) such Asset, if a Land Secured
Contract or a Mortgage Loan, must be secured by a valid first lien on the
related Real Property or Mortgaged Property.
"Rating Agency": As to any Series, any nationally recognized statistical
rating agency, or its successor, that on the Closing Date rated one or more
Classes of the Certificates of such Series at the request of the Company. If
such agency or a successor is no longer in existence, "Rating Agency" shall be
such nationally recognized statistical rating agency, or other comparable
Person, designated by the Company, notice of which designation shall be given to
the Trustee and the Servicer. References herein to any rating category of a
Rating Agency shall mean such rating category without regard to any plus or
minus or numerical designation.
"Real Property": Land and improvements thereon subject to the lien of the
Mortgage securing a Land Secured Contract.
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"Realized Interest Loss": A shortfall in interest resulting from the receipt
of Liquidation Proceeds in respect of a Contract or Mortgage Loan in an amount
that is insufficient to pay accrued and unpaid interest thereon.
"Realized Loss": Either (a) with respect to any Liquidated Loan, (1) the
Unpaid Principal Balance of the Liquidated Loan, plus accrued and unpaid
interest on such Liquidated Loan, plus amounts reimbursable to the Servicer for
previously unreimbursed Servicing Advances, minus (2) Net Liquidation Proceeds
collected in respect of the Liquidated Loan or (b) with respect to any Asset
that has been the subject of a Principal Cramdown, an Obligor Bankruptcy Loss
with respect to such Asset.
"Record Date": With respect to each Distribution Date, the end of the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"Recordation Report": A report substantially in the form of Exhibit 3 hereto
provided by the Trustee (or the Custodian) pursuant to Section 2.03(c)(5) hereof
identifying those Mortgage Loans for which a Mortgage or an Assignment remains
unrecorded.
"Regular Certificate": A Certificate other than a Residual Certificate and
that is a Regular Interest in a REMIC or a combination of Regular Interests in a
REMIC.
"Regular Interests": Interests in a REMIC that are designated as "regular
interests" under the REMIC Provisions.
"Regulations": The regulations promulgated under the Code by the Treasury.
"Related Proceeds': As defined in Section 3.04(c) hereof.
"REMIC": A "real estate mortgage investment conduit," within the meaning of
the REMIC Provisions. As to a particular Trust, those assets of the Trust as to
which an election is to be made to be treated as a "real estate mortgage
investment conduit," within the meaning of section 860D of the Code. A REMIC
generally is an elective entity for federal income tax purposes that consists of
a fixed pool of qualifying assets in which investors hold multiple classes of
interests. In order to be treated as a REMIC, such pool will be required to meet
ongoing qualification requirements provided by the Code, Regulations, and
binding pronouncements of the Internal Revenue Service, as in effect from time
to time.
"REMIC Loan-to-Value Ratio": The quotient, expressed as a percentage,
obtained by dividing (a) the original unpaid principal balance of an Asset, plus
the full amount of any other indebtedness secured by the related Manufactured
Home or Mortgaged Property which is senior to, or PARI PASSU with, such Asset by
(b) the sale price of the Manufactured Home or Mortgaged Property that secures
such Asset. Alternatively, the REMIC Loan-to-Value Ratio may be determined by
dividing (a) the unpaid principal balance of an Asset as of the Startup Day plus
the full amount of any other indebtedness secured by the related Manufactured
Home or Mortgaged Property which is senior to, or PARI PASSU with, such Asset by
(b) the fair market value of the Manufactured Home or Mortgaged Property that
secures such Asset on the Startup Day.
"REMIC Provisions": Provisions of the Code relating to real estate mortgage
investment conduits, which appear at sections 860A through 860G of the Code,
related Code provisions, and Regulations (whether in proposed, temporary or
final form), announcements and rulings thereunder, as
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the foregoing may be in effect from time to time.
"Remittance Amount": With respect to any Remittance Date and related
Distribution Date, the sum of the following amounts:
(a) the Monthly Payment that was due on each Outstanding Asset
on the Due Date occurring in the related Collection Period and that was
received by the Servicer from the related Obligor;
(b) all amounts received during the related Collection Period
in respect of any Asset that was Outstanding at the beginning of the
related Collection Period representing late payments of principal and
interest due on such Asset prior to the Due Date occurring in the
related Collection Period, to the extent such amounts exceed
outstanding unreimbursed P&I Advances made by the Servicer with respect
to such Asset;
(c) each Principal Prepayment (whether full or partial) of any
Asset that was Outstanding at the beginning of the related Prepayment
Period received by the Servicer during the related Prepayment Period;
(d) any amounts received by the Servicer during the related
Prepayment Period as Net Liquidation Proceeds with respect to any Asset
that was Outstanding at the beginning of the related Prepayment Period
(net of outstanding unreimbursed P&I Advances made by the Servicer with
respect to such Asset); and
(e) all amounts deposited into the Certificate Account during
the related Prepayment Period as a result of any purchase or repurchase
of any Asset pursuant to Section 2.06 hereof (net of outstanding
unreimbursed P&I Advances made by the Servicer with respect to such
Asset).
"Remittance Date": The Business Day preceding each Distribution Date, which
is the date by which funds must be remitted by the Servicer from the Certificate
Account to the Distribution Account or, if the Certificate Account is maintained
by the Trustee, the date on which the Servicer is to notify the Trustee of the
related Remittance Amount, in either case pursuant to Section 3.07(b) hereof.
"Remittance Report": As defined in Section 4.01 hereof.
"Rents From Real Property": With respect to any REO Property, gross income
of the character described in Code section 856(d) and Treasury regulations
thereunder.
"REO Property": A Mortgaged Property acquired by the Servicer on behalf of
the Certificateholders through foreclosure or deed-in-lieu of foreclosure, as
further described in Section 3.09 hereof.
"REO Property Disposition": The receipt by the Servicer of Insurance
Proceeds and other payments and recoveries (including Liquidation Proceeds)
which the Servicer recovers from the sale or other disposition of an REO
Property.
"Replaced Asset": An Asset replaced or to be replaced by a Qualified
Substitute Asset.
"Repo Property": A Manufactured Home (and any related Real Property)
acquired by the Servicer on behalf of the Trust pursuant to a repossession,
foreclosure, or similar proceeding in
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connection with a Defaulted Contract.
"Repurchase Price": With respect to any Asset to be purchased or repurchased
pursuant to Section 2.05 hereof, an amount equal to the Unpaid Principal Balance
of such Asset as of the close of business on the date of such purchase or
repurchase, together with all accrued and unpaid interest thereon to the end of
the Collection Period in which such purchase or repurchase occurs.
"Repurchaser": Any Person that repurchases or purchases a Contract from the
Trust pursuant to Section 2.06 hereof.
"Request for Release": A release signed by an Officer of the Servicer in the
form attached hereto as Exhibit 4.
"Reserve Fund": Any fund designated as a "Reserve Fund" in a Pooling and
Servicing Agreement.
"Residual Certificate": Any one of the Classes of Certificates of a Series
designated as such in the related Pooling and Servicing Agreement.
"Residual Interest": An interest in a REMIC that is designated as a
"residual interest" under the REMIC Provisions.
"Residual Majority": At any time, the Holders of a majority (by Percentage
Interests) of the Residual Certificates.
"Residual Transferee Agreement": A certification and agreement required to
be executed and delivered by the prospective transferee of a Residual
Certificate pursuant to Section 5.05(c) hereof, which must be substantially in
the form of Exhibit 8 hereto.
"RESPA": The Real Estate Settlement Procedures Act of 1974, as amended.
"Rule 144A": Rule 144A promulgated by the Securities and Exchange
Commission, as the same may be amended from time to time.
"Rule 144A Agreement": An agreement substantially in the form of Exhibit 5
hereto.
"Rule 144A Certificates": Any Class of Certificates of a Series designated
as such in the related Pooling and Servicing Agreement.
"Sales Agreement": A Sales Agreement pursuant to which DFC (or another
Seller) sells Contracts and/or Mortgage Loans to the Company for inclusion in a
Trust.
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"Scheduled Principal Balance": As of any date of determination with respect
to any Contract, Repo Property, Mortgage Loan or REO Property, (a) the Cut-off
Date Principal Balance of such Contract or Mortgage Loan (or of the related
Contract or Mortgage Loan, in the case of a Repo Property or REO Property) minus
(b) the sum of (1) the principal components of any Monthly Payments due on such
Contract or Mortgage Loan (or on the related Contract or Mortgage Loan, in the
case of a Repo Property or REO Property) after the related Cut-off Date and on
or before such date of determination (regardless of whether such Monthly
Payments were received from the related Obligor) plus (2) all principal
prepayments received by the Servicer on such Contract or Mortgage Loan (or on
the related Contract or Mortgage Loan, in the case of a Repo Property or REO
Property) (including the principal portion of Net Liquidation Proceeds and the
principal portion of all amounts paid by the Seller or another party to
repurchase such Contract or Mortgage Loan) on or after the Cut-off Date and on
or prior to the end of the Prepayment Period preceding the date of
determination, plus (3) all Realized Losses incurred on such Contract or
Mortgage Loan (or the related Contract or Mortgage Loan, in the case of a Repo
Property or REO Property) on or after the Cut-off Date and on or prior to such
date of determination.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": As to any Contract or Mortgage Loan included in the Trust Estate
for a Series, the entity that sold such Contract or Mortgage Loan to the Company
under a Sales Agreement, which will be DFC unless otherwise specified in the
related Pooling and Servicing Agreement. For purposes of the definitions of
"Contract Documents" and "Mortgage Loan Documents" herein, documents (including,
without limitation, certificates of title, UCC filing instruments, assignments
and endorsements) indicating assignment or endorsement to, or the existence of a
security interest in, a name that is a registered trade name of the Seller in
the relevant jurisdiction shall satisfy any requirement of these Standard Terms
that such documents reflect the name of the "Seller."
"Series": A separate Series of Certificates issued pursuant to a Pooling and
Servicing Agreement, which Series may, as provided therein, be divided into two
or more Classes.
"Servicer": OAC, as servicer of any of the Assets under any Pooling and
Servicing Agreement, and its permitted successors and assigns thereunder.
"Servicer Contract File": As to each Contract, a file maintained by the
Servicer that contains the related loan application and credit report, any
correspondence relating to the Contract, and all other instruments, documents,
papers, ledger cards, accounting records, and computer print-outs maintained by
the Servicer now or hereafter in connection with the servicing of the Contracts,
which may be maintained on microfilm or on computer-readable optical disk or on
any other medium selected by the Servicer.
"Servicer Custodial Certification": A certification executed by an Officer
of the Servicer substantially in the form of Exhibit 1 hereto.
"Servicer File": As to any Asset, the related Servicer Contract File or
Servicer Mortgage Loan File, as applicable.
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"Servicer Mortgage Loan File": As to each Mortgage Loan, a file maintained
by the Servicer that contains (1) an original Standard Hazard Insurance Policy
(and flood insurance policy, if required pursuant to Section 3.16 hereof)
relating to the underlying Mortgaged Property or a certificate of insurance
issued by the insurer or its agent indicating that a Standard Hazard Insurance
Policy (and a flood insurance policy, if required pursuant to Section 3.16
hereof) is in effect with respect to such Mortgaged Property, (2) originals or
copies of all documents submitted to a Mortgage Insurer for credit and property
underwriting approval, (3) the originals of all RESPA and Regulation Z
disclosure statements executed by the related Mortgagors, (4) the appraisal
report made in connection with the origination of the Mortgage Loan, (5) the
settlement statement for the purchase and/or refinancing of the underlying
Mortgaged Property by the related Mortgagor under the related Mortgage Note and
Mortgage, (6) the originals of any tax service contracts, (7) documentation
relating to any approvals by the Servicer of any modifications of the original
related Mortgage Loan Documents and any releases of collateral supporting the
related Mortgage Loan, together with copies of the documentation effecting any
such modifications or releases, (8) collection notices or form notices sent to
the related Mortgagor, (9) foreclosure correspondence and legal notifications,
if applicable, (10) water and irrigation company stock certificates, if
applicable, and (11) all other documents relating to such Mortgage Loan which
would customarily be maintained in a mortgage loan file by the Servicer in order
to service the mortgage loan properly, as well as any other documents relating
to such Mortgage Loan (other than Mortgage Loan Documents) that come into the
Servicer's possession.
"Servicing Account": As defined in Section 3.05 hereof.
"Servicing Advances": Advances required to be made by the Servicer as
described in Section 3.04(a) hereof, including, but not limited to, advances for
the payment of personal property taxes, real estate taxes and premiums for
Standard Hazard Insurance Policies.
"Servicing Fee": On each Distribution Date for each Asset, the product
obtained by multiplying (a) one-twelfth of the Servicing Fee Rate by (b) the
Scheduled Principal Balance of such Asset immediately prior to the preceding
Collection Period (without giving effect to any Principal Prepayments, Net
Liquidation Proceeds and Repurchase Prices received (or Realized Losses
incurred) on the day preceding the beginning of such Collection Period).
"Servicing Fee Rate": A PER ANNUM rate, to be specified in each Pooling and
Servicing Agreement.
"Shortfall": Due Date Interest Shortfall and Soldiers' and Sailors'
Shortfall.
"Soldiers' and Sailors' Shortfall": Interest losses on a Contract or
Mortgage Loan resulting from application of the Soldiers' and Sailors' Civil
Relief Act of 1940.
"Special Hazard Insurance Policy": An insurance policy covering a Contract
or Mortgage Loan against loss by reason of fire, lightning, explosion, smoke,
windstorm, hail, riot, strike and civil commotion.
"Special Hazard Loss": A loss incurred on a Contract or Mortgage Loan
attributable to physical damage to the related Manufactured Home or Mortgaged
Property of a type which is not covered by standard hazard insurance policies,
excluding losses caused by war, nuclear reaction, nuclear or atomic weapons,
insurrection or normal wear and tear.
"Special Tax Consent": The written consent of the Holder of a Residual
Certificate to any tax (or
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risk thereof) arising out of a proposed transaction or activity that may be
imposed upon such Holder or that may affect adversely the value of such Holder's
Residual Certificate.
"Special Tax Opinion": An Opinion of Counsel that a proposed transaction or
activity will not (a) affect adversely the status of the REMIC as a REMIC or the
related Regular Certificates as the regular interests therein, (b) affect the
timing or amount of distributions of interest or principal on such Regular
Certificates, or (c) result in the encumbrance of the Contracts by a tax lien.
"Standard Hazard Insurance Policy": With respect to each Contract, the
policy of fire and extended coverage insurance (and any federal flood insurance,
if applicable) required to be maintained for the related Manufactured Home as
provided herein, which may be a blanket mortgage impairment policy maintained by
the Servicer in accordance with the terms and conditions of the Pooling and
Servicing Agreement.
"Standard Terms": These Standard Terms to Pooling and Servicing Agreement
and all exhibits, schedules and appendices hereto, as amended and supplemented
from time to time.
"Startup Day": The Startup Day (within the meaning of Code section
860G(a)(9)) is the Closing Date.
"Tax Matters Person": The Person or Persons designated from time to time
hereunder to act as tax matters person (within the meaning of the REMIC
Provisions) of the REMIC.
"Terminating Purchase": The purchase of all Contracts and Mortgage Loans and
each Repo Property and REO Property owned by a Trust pursuant to Section 9.01
hereof.
"Termination Account": An escrow account maintained by the Trustee into
which any Trust funds not distributed on the Distribution Date on which the
earlier of (a) a Terminating Purchase or (b) the final payment or other
liquidation of the last Asset remaining in the Trust or the disposition of the
last Repo Property or REO Property remaining in the Trust is made are deposited.
The Termination Account shall be an Eligible Account.
"Termination Date": Any Distribution Date fixed for termination of the Trust
pursuant to the provisions of Sections 9.01 and 9.02 hereof.
"Termination Price": With respect to any Terminating Purchase, the greater
of (1) the sum of (a) any Liquidation Expenses incurred by the Servicer in
respect of any Asset that has not yet been liquidated, (b) all amounts required
to be reimbursed or paid to the Servicer in respect of previously unreimbursed
Servicing Advances, plus (c) the sum of (i) 100% of the aggregate of the Unpaid
Principal Balance of each Asset remaining in the Trust on the day of such
purchase, plus accrued interest thereon at the related Asset Rate through the
end of the Interest Accrual Period relating to the Termination Date, plus (ii)
the lesser of (A) the aggregate of the Unpaid Principal Balances of each Asset
relating to any Repo Property or REO Property remaining in the Trust, plus
accrued interest thereon at the related Asset Rate through the end of the
Interest Accrual Period related to the Termination Date and (B) the current
appraised value of any such Repo Property or REO Property (net of Liquidation
Expenses to be incurred in connection with the disposition of such Repo Property
or REO Property, estimated in good faith by the Servicer), such appraisal to be
conducted by an appraiser mutually agreed upon by the Servicer and the Trustee,
plus all previously unreimbursed P&I Advances made in respect of such Repo
Property or REO Property and (2) the aggregate fair market value of all of the
assets of the Trust (as reasonably determined in good faith by the Servicer as
of the close of business on the third Business Day preceding the date upon which
notice of any such purchase is furnished to Certificateholders pursuant
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to Section 9.01(c) hereof), plus all previously unreimbursed P&I Advances made
with respect to the Assets. The fair market value of the assets of the Trust
shall be deemed to include accrued interest through the end of the Interest
Accrual Period related to the Termination Date at the applicable Asset Rate on
the unpaid principal balance of each Asset (including any Asset that became a
Repo Property or REO Property, which Repo Property or REO Property has not yet
been disposed of by the Servicer). The basis for any such valuation shall be
furnished by the Servicer to the Certificateholders upon request.
"Terminator": The Person making a Terminating Purchase or causing such
Terminating Purchase to be made.
"TIN": Taxpayer identification number.
"Title Insurance Policy": For any Mortgage Loan, an American Land Title
Association mortgagee's mortgage loan title policy form 1970, or other form of
mortgagee's title insurance acceptable to FNMA or FHLMC for the jurisdiction in
which the subject property is located, including all riders and endorsements
thereto, insuring that the related Mortgage creates a valid first lien on the
underlying Mortgaged Property subject only to Permitted Encumbrances.
"Transferee Agreement": An agreement substantially in the form of Exhibit 6
hereto.
"Treasury": The United States Department of the Treasury.
"Trust": The trust created pursuant to the terms of a Pooling and Servicing
Agreement.
"Trust Estate": The segregated pool of assets sold and assigned to a Trustee
by the Company pursuant to the conveyance clause of any Pooling and Servicing
Agreement.
"Trustee": The bank or trust company identified as the trustee under any
Pooling and Servicing Agreement.
"Trustee Mortgage Loan File": As to each Mortgage Loan, a file containing
all of the related Mortgage Loan Documents.
"UCC": The Uniform Commercial Code as in effect in any relevant
jurisdiction.
"Unpaid Principal Balance": With respect to any Asset, the outstanding
principal balance payable by the related Obligor pursuant to the terms of such
Asset.
"U.S. Person": A Person other than a Non-U.S. Person.
"USAP": As defined in Section 3.13 hereof.
"VA": The United States Department of Veterans Affairs.
"VA Asset": An Asset guaranteed in whole or in part by the VA.
"VA Guaranty": As to any VA Asset, VA's full or partial guaranty of payment
of amounts due thereunder.
"Voting Rights": With respect to any Certificate, the portion of the voting
rights of all of the Certificates of the related Series which is allocated to
such Certificate. Unless otherwise provided in the
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related Pooling and Servicing Agreement, (a) if any Class of Certificates does
not have a Certificate Principal Balance or has an initial Certificate Principal
Balance that is less than or equal to 1% of the aggregate Certificate Principal
Balance of all the Certificates of its Series, then 1% of the Voting Rights for
such Series shall be allocated to each such Class, and the balance of the Voting
Rights for such Series shall be allocated among the remaining Classes of
Certificates of such Series in proportion to their respective Certificate
Principal Balances following the most recent Distribution Date, and (b) if no
Class of Certificates of such Series has an initial Certificate Principal
Balance less than 1% of the aggregate Certificate Principal Balance of all
Certificates of such Series, then all of the Voting Rights for such Series shall
be allocated among all the Classes of Certificates of such Series in proportion
to their respective Certificate Principal Balances following the most recent
Distribution Date. Voting Rights allocated to each Class of Certificates shall
be allocated among the Certificates of such Class in proportion to the
respective Percentage Interests of the Holders thereof.
"Withholding Agent": The Trustee or its designated Paying Agent or other
Person who is liable to withhold federal income tax from a distribution on a
Residual Certificate under sections 1441 or 1442 of the Code and the Regulations
promulgated thereunder.
"Writedown Amount": With respect to any Distribution Date for a Series, the
amount, if any, by which (1) the aggregate Certificate Principal Balance of all
Certificates of such Series, after all distributions have been made on such
Certificates on such Distribution Date, exceeds (2) the Pool Scheduled Principal
Balance of the related Assets for the next Distribution Date.
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ARTICLE II
THE ASSETS
Section 2.01. Assignment of Assets.
Pursuant to a Pooling and Servicing Agreement, the Company has sold to the
Trustee without recourse all the right, title and interest of the Company in and
to the Assets identified in such Pooling and Servicing Agreement, any and all
rights, privileges and benefits accruing to the Company under the Sales
Agreement(s) with respect to such Assets (except any rights of the Company to
fees payable by the Seller under such Sales Agreement and provided that the
Company shall retain its rights to indemnification from the Seller under such
Sales Agreement, but shall also convey rights to such indemnification to the
Trustee as its assignee), including the rights and remedies with respect to the
enforcement of any and all representations, warranties and covenants under such
Sales Agreements and assets included or to be included in the related Trust for
the benefit of the related Certificateholders as set forth in the conveyance
clause of the related Pooling and Servicing Agreement. Such assignment includes
all of the Company's rights to payments due with respect to the Assets after the
Cut-off Date.
Section 2.02. The Contracts.
(a) Servicer's Custody of Contract Files and Servicer Contract Files. The
parties to the Pooling and Servicing Agreement, by their execution thereof,
acknowledge the Servicer's appointment to serve as custodian of the Contract
Files and the Servicer Contract Files as described herein for the benefit of the
Certificateholders and the Trustee. The Servicer, by its execution of the
Pooling and Servicing Agreement, agrees to, and shall, retain possession of the
Contract File and the Servicer Contract File pertaining to each of the Contracts
on behalf of the Certificateholders and the Trustee. Without limiting the
foregoing, the Trustee acknowledges that, with respect to each Contract secured
by a Manufactured Home located in Virginia as to which the Trustee is identified
as first lienor on the related certificate of title, for purposes of Section
46.2-641 of the Virginia Code (as currently in effect), the Servicer is holding
such Contract and the related certificate of title as bailee and agent for the
Trustee as such first lienor.
The Servicer shall hold each Contract and any other documents constituting
each Contract File and each Servicer Contract File that are in the possession of
the Servicer or that at any time come into the possession of the Servicer in
trust as custodian for the Holders of the Certificates, and the Servicer hereby
acknowledges and declares that it holds and will hold or has agreed to hold such
documents as custodian and as the bailee for, and for the exclusive use and
benefit of, the Holders of the Certificates in accordance with the terms of the
Pooling and Servicing Agreement, and shall make disposition thereof only in
accordance with the Pooling and Servicing Agreement. The Servicer shall
segregate and maintain continuous custody of all documents constituting the
Contract Files in its possession in secure and fireproof-rated locked files or
vaults in accordance with customary standards for such custody.
From time to time, the Company or the Seller shall deliver to the Servicer
for inclusion in the appropriate Contract File, the original Contract Documents
for any Contract to the extent that copies of such original documents were
initially included in such Contract File or in the event that only a copy of an
application for an original Contract Document was initially included among the
related Contract Documents. In addition, the Servicer shall add to the
appropriate Contract File any additional original documents received by the
Servicer that evidence a modification of the related Contract approved by the
Company.
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The Servicer shall maintain custody of the Contract Files and Servicer
Contract Files for each Series in its possession at its offices where the
Contract Files and Servicer Contract Files are presently maintained or at such
other offices of the Servicer in the State of North Carolina as the Servicer may
identify to the Trustee by written notice provided at least ten days prior to
the Servicer's change of the location of its custody of the Contract Files and
Servicer Contract Files. The Servicer may not move the location of its custody
of the Contract Files and Servicer Contract Files for any Series outside of the
State of North Carolina without first giving 30 days' prior written notice of
such relocation to each applicable Rating Agency and the Trustee and obtaining
each such Rating Agency's written confirmation that such relocation will not
result in any downgrading of any Certificates of such Series. Notwithstanding
the foregoing, the Servicer may temporarily move individual Contract Files or
any portions thereof without notice to the Trustee or any Rating Agency as may
be necessary for it to conduct collection and other servicing activities in
accordance with its customary practices and procedures. In acting as custodian
of the Contract Files, the Servicer agrees not to assert any ownership interests
in the Contracts or the Contract Files, and to indicate to any third parties,
promptly upon their inquiry to the Servicer, that the Contracts and the Contract
Files have been sold and assigned to the appropriate Trust.
(b) Review of Contract Files. Prior to the Closing Date, the Servicer's
operations department will complete a review of all of the Contract Files
(including the certificates of title to, or other evidence of a perfected
security interest in, the related Manufactured Homes), confirming the accuracy
of the Contract Schedule delivered to the Trustee. On or before the Closing
Date, the Servicer shall deliver to the Trustee a Servicer Custodial
Certification signed by one of its Officers confirming that it is in possession
of the Contract File for each Contract identified on Schedule I to the Pooling
and Servicing Agreement, subject to any exceptions noted in a schedule to such
certificate. Such certification shall be substantially in the form of Exhibit 1
hereto.
In giving its Servicer's Custodial Certification with respect to a Series,
the Servicer shall be under no duty or obligation (A) to inspect, review or
examine any such documents, instruments, securities or other papers to determine
that they or the signatures thereon are genuine, enforceable, or appropriate for
the represented purpose or that they have actually been recorded or that they
are other than what they purport to be on their face or (B) to determine whether
any Contract File should include any assumption agreement, modification
agreement or waiver agreement.
If the Servicer discovers any discrepancy between any Contract and the
Contract Schedule, or that any required Contract Document is defective or
missing from the related Contract File, in either case in a manner that is
materially adverse to the interests of the Certificateholders, it shall
immediately provide written notice to the Seller (unless the Seller is the
Servicer) and the Trustee of such discrepancy, incompleteness or defect. If the
Seller does not cure such discrepancy or such incomplete or defective Contract
File within 90 days after its receipt of written notice of such discrepancy,
incompleteness or defect, the Servicer shall take all steps within its power to
enforce the Trustee's right to require the Seller to repurchase the affected
Contract (or in the alternative to substitute for such Contract, if the
substitution will take place within two years after the Closing Date) pursuant
to the applicable Sales Agreement or, in the alternative (if the discrepancy
consists of an overstatement in the Contract Schedule of the Cut-off Date
Principal Balance of a Contract), to deposit cash into the related Certificate
Account in the amount of such overstatement of the Cut-off Date Principal
Balance of a Contract in the Contract Schedule (as described in the applicable
Sales Agreement).
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(c) Security Interests in the Contracts, Manufactured Homes and Real
Property.
(1) Perfection of Trustee's Security Interest in Contracts. On
or prior to the Closing Date, the Servicer shall cause to be filed in
all appropriate UCC filing offices, UCC-1 financing statements
describing the Trust Estate (including the Contracts and payments due
thereon after the Cut-off Date) and proceeds thereof as "collateral"
and (1) naming the Seller as "Debtor," the Company as "Secured Party,"
and the Trustee as "Assignee," and (2) naming the Company as "Debtor"
and the Trustee as "Secured Party." Each financing statement shall bear
a statement on the face thereof indicating that the parties intend the
financing statement to evidence a true sale of chattel paper, but that
if the transaction is recharacterized as a loan from the Trustee to the
Seller or as involving a loan from the Trustee to the Company or from
the Company to the Seller, the financing statement is to perfect the
Trustee's security interest in the chattel paper. The Servicer shall
cause to be filed all necessary continuation statements for each of the
aforementioned UCC-1 financing statements. Within one week after the
Closing Date, the Servicer will stamp the face of each Contract with
the following legend (with the name of the Trustee filled into each
blank): "This Contract has been assigned to ____________________, as
Trustee pursuant to a Pooling and Servicing Agreement among Deutsche
Financial Capital Securitization LLC, Oakwood Acceptance Corporation
and ________________."
(2) Perfection of Trustee's Security Interest in Manufactured
Homes. So long as the Contract Documents for each Contract contain
evidence of perfection of either the Seller's, the Company's or the
Trustee's security interest in the related Manufactured Home, neither
the Seller nor the Company shall be required to cause notations to be
made on any certificate or other document of title relating to such
Manufactured Home or to execute any transfer instrument (including,
without limitation, any UCC-3 assignments) relating to such
Manufactured Home, except under the limited circumstances described in
Section 2.06(b) below. Subject to the limitation described in the
preceding sentence, the Servicer shall take all steps necessary, at its
own expense, to maintain perfection of the Trustee's lien on each
Manufactured Home to the extent the Servicer receives notice of
relocation, re-registration or sale thereof.
(3) Real Estate Assignments. The Contract Documents for each
Land Secured Contract are required to contain evidence that the Seller
has record title to the Real Property underlying such Land Secured
Contract. Neither the Seller nor the Company will be required to
prepare, deliver or record any assignments to the Company or the
Trustee in recordable form for the Mortgages related to such Land
Secured Contracts. However, on or before the Closing Date, the Seller
shall deliver to the Trustee an executed power of attorney
substantially in the form of Exhibit 9 hereto, authorizing the Trustee
to execute and record assignments of Mortgages securing Land Secured
Contracts from the Seller to the Trustee in the event that recordation
of such assignments becomes necessary for foreclosure on the related
Real Property by or on behalf of the Trustee. Pursuant to such power of
attorney, at the Servicer's instruction, the Trustee shall execute any
such assignments as are provided to the Trustee by the Servicer. After
execution of any such assignments, the Trustee shall redeliver such
assignments to the Servicer at the Servicer's expense. Any expenses
incurred by the Servicer in connection with the foregoing or in
connection with its recordation of assignments in preparation for a
foreclosure on a Land Secured Contract shall constitute Liquidation
Expenses.
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Section 2.03. The Mortgage Loans.
(a) Custody of Trustee Mortgage Loan Files. In connection with the transfer
and assignment of the Mortgage Loans from the Company to the Trustee, the
Company shall deliver, or cause to be delivered, to the Trustee or its Custodian
on or before the Closing Date, a Trustee Mortgage Loan File containing each of
the documents listed in the definition thereof. If any Mortgage or an Assignment
of a Mortgage to the Trustee or any prior Assignment is in the process of being
recorded on the Closing Date, the Company shall cause each such original
recorded document or certified copy thereof, to be delivered to the Trustee or
its Custodian promptly following its recordation. The Company shall also cause
to be delivered to the Trustee any other original Mortgage Loan Document to be
included in the Trustee Mortgage Loan File if a copy thereof initially was
delivered.
In lieu of recording an Assignment of any Mortgage for any Mortgage Loan,
the Company may deliver or cause to be delivered to the Trustee or its Custodian
the Assignment of the Mortgage from the Seller to the Trustee in a form suitable
for recordation, together with an Opinion of Counsel to the effect that
recording is not required to protect the Trustee's right, title and interest in
and to the related Mortgage Loan or, in case a court should recharacterize the
sale of the Mortgage Loans as a financing, to perfect a first priority security
interest in favor of the Trustee in the related Mortgage Loan. In the event that
the Servicer receives notice that recording is required to protect the right,
title and interest of the Trustee in and to any such Mortgage Loan for which
recordation of an Assignment has not previously been required, the Servicer
shall promptly notify the Trustee and the Trustee shall within five Business
Days of its receipt of such notice deliver, or cause to be delivered, each
previously unrecorded Assignment to the Servicer for recordation.
By its execution of the Pooling and Servicing Agreement for a Series, the
Trustee acknowledges and declares that it or the Custodian holds and will hold
or has agreed to hold all documents delivered to it from time to time with
respect to a Mortgage Loan underlying such Series and all other assets delivered
to it or its Custodian and that are included in the definition of "Trust Estate"
in the related Pooling and Servicing Agreement in trust for the exclusive use
and benefit of all present and future Certificateholders.
(b) Custody of Servicer Mortgage Loan Files. The Servicer has in its
possession a Servicer Mortgage Loan File for each Mortgage Loan containing each
of the documents listed in the definition thereof. All such documents shall be
held by the Servicer in trust for the benefit of the Trustee on behalf of the
Certificateholders.
(c) Review of Trustee Mortgage Loan Files.
(1) Initial Certification. The Trustee shall, for the benefit of
the Certificateholders for any Series, review each related Trustee
Mortgage Loan File prior to the related Closing Date to ascertain that
all documents required to be included in the Trustee Mortgage Loan File
are included therein, and shall deliver to the Company and the Servicer
on such Closing Date an Initial Certification with respect to each
underlying Mortgage Loan (except any Mortgage Loan that has been
liquidated or purchased from the related Trust prior to such Closing
Date) to the effect that, except as specifically noted on a schedule of
exceptions thereto, (A) all documents required to be contained in the
Trustee Mortgage Loan File are in its possession, (B) such documents
have been reviewed by it and appear regular on their face and relate to
such Mortgage Loan, and (C) based on its examination and only as to the
foregoing documents, the information set forth on the related Mortgage
Loan Schedule accurately reflects information set
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forth in the Trustee Mortgage Loan File.
It is understood that before making the Initial Certification
for any Series, the Trustee shall examine the related Mortgage Loan
Documents to confirm that:
(A) each Mortgage Note and Mortgage bears an original
signature or signatures purporting to be that of the Person or
Persons named as the maker and mortgagor/trustor or, if
photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
(B) except for the endorsement to the Trustee,
neither the Mortgage nor any Assignment, on the face or the
reverse side(s) thereof, contain evidence of any unsatisfied
claims, liens, security interests, encumbrances or
restrictions on transfer;
(C) the principal amount of the indebtedness secured
by the related Mortgage is identical to the original principal
amount of the related Mortgage Note;
(D) the Assignment of the related Mortgage from the
Seller to the Trustee is in the form required pursuant to
clause (c) of the definition of Mortgage Loan Documents, and
bears an original signature of the Seller and any other
necessary party (or signatures purporting to be that of the
Seller and any such other party) or, if photocopies are
permitted, that such copies bear a reproduction of such
signature or signatures;
(E) if intervening Assignments are included in the
Trustee Mortgage Loan File, each such intervening Assignment
bears an original signature of the related mortgagee and/or
the assignee (and any other necessary party) (or signatures
purporting to be that of the Seller and any such other party)
or, if photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
(F) if either a Title Insurance Policy, a preliminary
title report or a written commitment to issue a Title
Insurance Policy is delivered, the address of the real
property set forth in such policy, report or written
commitment is identical to the real property address contained
in the related Mortgage; and
(G) if any of a Title Insurance Policy, certificate
of title insurance or a written commitment to issue a Title
Insurance Policy is delivered, such policy, certificate or
written commitment is for an amount not less than the original
principal amount of the related Mortgage Note and such Title
Insurance Policy insures that the related Mortgage creates a
first lien, senior in priority to all other deeds of trust,
mortgages, deeds to secure debt, financing statements and
security agreements and to any mechanics' liens, judgment
liens or writs of attachment (or if the Title Insurance Policy
or certificate of title insurance has not been issued, the
written commitment for such insurance obligates the insurer to
issue such policy for an amount not less than the original
principal amount of the related Mortgage Note).
(2) Final Certification. Prior to the first anniversary date
of the Closing Date for a Series, the Trustee shall deliver to the
Company and the Servicer a Final Certification evidencing the
completeness of the Trustee Mortgage Loan File for each Mortgage Loan,
with any applicable exceptions noted on such Final Certification.
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(3) Certifications Generally. In giving each of the Initial
Certification and the Final Certification with respect to a Series, the
Trustee shall be under no duty or obligation (A) to inspect, review or
examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereon are genuine, enforceable,
or appropriate for the represented purpose or that they have actually
been recorded or that they are other than what they purport to be on
their face or (B) to determine whether any Trustee Mortgage Loan File
should include any assumption agreement, modification agreement,
written assurance or substitution agreement.
(4) Recordation Report. No later than the fifth Business Day
of each third month, commencing the fourth month following the month in
which the Closing Date for a Series occurs, the Trustee shall deliver
to the Servicer a Recordation Report for such Series, dated as of the
first day of such month, identifying those Mortgage Loans underlying
such Series for which it has not yet received (A) an original recorded
Mortgage or a copy thereof certified to be true and correct by the
public recording office in possession of such Mortgage or (B) an
original recorded Assignment of the Mortgage to the Trustee and any
required intervening Assignments or a copy thereof certified to be a
true and correct copy by the public recording office in possession of
such Assignment; PROVIDED, HOWEVER, that the Trustee shall not be
required to provide a Recordation Report with respect to the
recordation of an Assignment for any Mortgage Loan for which there has
been delivered an Assignment in recordable form pursuant to Section
2.03(a) hereof unless the Trustee has delivered such Assignment to the
Servicer for recordation, in which case, the Trustee shall deliver a
Recordation Report as to the status of such Assignment in accordance
with this paragraph commencing in the fourth month following the
delivery of such Assignment to the Servicer for recordation.
(5) Custodians. In lieu of taking possession of the Trustee
Mortgage Loan Files and reviewing such files itself, the Trustee may,
in accordance with Section 8.11 hereof, appoint one or more Custodians
to hold the Trustee Mortgage Loan Files for a Series on its behalf and
to review them as provided in this Section 2.03. The Company shall,
upon notice of the appointment of a Custodian, deliver or cause to be
delivered all documents to the Custodian that would otherwise be
deliverable to the Trustee. In such event, the Trustee shall obtain
from each such Custodian, within the specified times, the Initial and
Final Certifications and the Recordation Reports with respect to those
Mortgage Loans held and reviewed by such Custodian and may deliver such
Certifications and Reports to the Company and the Servicer in
satisfaction of the Trustee's obligation to prepare such Certification
and Reports. The Trustee shall notify the Custodian of any notices
delivered to the Trustee with respect to those Trustee Mortgage Loan
Files.
(d) Recordation with Respect to Mortgage Loans.
Notwithstanding any provisions in these Standard Terms to the contrary,
the Company shall cause Assignments of Mortgages to the Trustee to be
prepared and recorded with respect to all Mortgages not later than
one-hundred twenty (120) calendar days following the Closing Date,
which recordation shall be an expense of the Company. For each Mortgage
for which an Assignment of Mortgage is not duly and timely recorded as
provided above, the Company shall repurchase such Mortgage pursuant to
the provisions of 2.06 hereof. As evidence of recordation, the Trustee
shall be entitled to rely upon, among other things (i) a certification
from a title insurance company, (ii) an Opinion of Counsel, (iii) a
recorded Assignment or (iv) a clerk's receipt as to the recordation of
any or all of the Assignments.
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Section 2.04. Representations and Warranties of the Trustee.
As of the Closing Date, the Trustee represents and warrants that (1) it
acquired the Assets on behalf of the Trust from the Company in good faith, for
value, and without notice or knowledge of any adverse claim, lien, charge,
encumbrance or security interest (including, without limitation, federal tax
liens or liens arising under ERISA), (2) except as permitted in the related
Pooling and Servicing Agreement and these Standard Terms, it has not and will
not, in any capacity, assert any claim or interest in the Assets, and (3) it has
not encumbered or transferred its right, title or interest in the Assets. The
representation and warranty made in clause (1) above with respect to the absence
of any adverse claim, lien, charge, encumbrance or security interest is made by
the Trustee without any independent investigation and without recourse or
warranty, except that the Trustee believes such representation and warranty to
be true.
Section 2.05. Representations and Warranties as to Assets.
The Company represents and warrants to the Trustee, effective as of the
Closing Date, that the following information is true and correct in all material
respects:
(a) The information pertaining to each Asset set forth in the Asset Schedule
was true and correct at the date or dates respecting which such information was
furnished.
(b) The Company is the owner of, or holder of a perfected first priority
security interest in, each Asset.
(c) The Company acquired its ownership of, or security interest in, each
such Asset in good faith without notice of any adverse claim.
(d) Except for the sale to the Trustee, the Company has not assigned any
interest or participation in each such Asset (or, if any such interest or
participation has been assigned, it has been released).
(e) The Company has full right to sell the Trust Estate to the Trustee.
It is understood and agreed that the representations and warranties set
forth in this Section 2.05 shall survive delivery of the respective Contract
Files to the Servicer as custodian for the Trustee and of the respective Trustee
Mortgage Loan Files to the Trustee or its Custodian and shall inure to the
benefit of the Trustee notwithstanding any restrictive or qualified endorsement
or assignment. Upon the discovery by the Company, the Servicer or the Trustee of
a breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other parties to
the Pooling and Servicing Agreement. It is understood and agreed that the
obligations of the Company set forth in Section 2.06 to cure, substitute for or
repurchase a Contract constitute the sole remedies available to the
Certificateholders or to the Trustee on their behalf respecting a breach of the
representations and warranties contained in this Section 2.05. It is further
understood and agreed that the Company shall be deemed not to have made the
representations and warranties in this Section 2.05 with respect to, and to the
extent of, representations and warranties made, as to the matters covered in
this Section 2.05, by the Seller in the related Sales Agreement assigned to the
Trustee.
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Section 2.06. Purchase or Substitution of Certain Assets.
(a) Breaches of Representations and Warranties and Incomplete or Defective
Asset Files.
(1) Seller Breach. Upon discovery or receipt of notice of any defective
document in an Asset File, or of any breach by the Seller of any
representation, warranty or covenant hereunder or under the Sales Agreement,
which defect or breach materially and adversely affects the value of any
Asset or the interest of the Trust therein (it being understood that any
such defect or breach shall be deemed to have materially and adversely
affected the value of the related Asset or the interest of the Trust therein
if the Trust incurs a loss as a result of such defect or breach), the
Trustee shall promptly notify the Servicer of such defect or breach and
direct the Servicer to request the Seller of such Asset to cure such defect
or breach. The Seller must cure such defect or breach, or purchase such
Asset from the Trustee on behalf of the Certificateholders, within 90 days
after the date on which the Seller was notified of such defect or breach. In
lieu of purchasing any such Asset as provided above, if so provided in the
related Sales Agreement, the Seller may cause such Asset to be removed from
the Trust (in which case it shall become a Replaced Asset) and substitute
one or more Qualified Substitute Assets in the manner and subject to the
limitations set forth in Section 2.06(g) below. Notwithstanding the
foregoing, however, if such breach is a Qualification Defect and one or more
REMIC elections have been made with respect to the related Trust, such cure,
purchase or substitution must take place within 75 days of the Defect
Discovery Date. It is understood and agreed that enforcement of the
obligation of the Seller to cure or to purchase (or to substitute for) any
Asset as to which a material defect in a constituent document exists or as
to which such a breach has occurred and is continuing, in addition to the
obligation of the Seller to indemnify the Company and its assignees
(including the Trust) for any losses and damages incurred in respect of any
such breach or defect, shall constitute the sole remedy respecting such
defect or breach available to the Trustee on behalf of the
Certificateholders. The Servicer shall use its best efforts to enforce the
Seller's obligations under its Sales Agreement to repurchase or substitute
for Assets affected by breaches of the Seller's representations and
warranties contained in its Sales Agreement, and to enforce the Seller's
obligations to indemnify the Trust (as the assignee of the Company under the
Sales Agreement) for any losses or damages it incurs as a result of breaches
of the Seller's representations and warranties contained in its Sales
Agreement.
(2) Servicer Breach. In addition to taking any action required pursuant
to Section 7.01 hereof, upon discovery or notice of any breach by the
Servicer of any representation, warranty or covenant hereunder not covered
by Section 2.06(a)(1) above which materially and adversely affects the value
of any Asset or the interest of the Trust therein (it being understood that
any such defect or breach shall be deemed to have materially and adversely
affected the value of the related Asset or the interest of the Trust therein
if the Trust incurs a loss as a result of such defect or breach), the
Trustee promptly shall notify the Servicer of such breach. Upon receipt of
such notification, the Servicer shall cure such breach or shall purchase
such Asset from the Trustee within 90 days after the date on which the
Servicer was notified of such breach. Notwithstanding the foregoing,
however, if such breach is a Qualification Defect and one or more REMIC
elections have been made with respect to the related Trust, such cure or
purchase must take place within 75 days of the Defect Discovery Date.
In the event the Seller has breached a representation or warranty under
its Sales Agreement that is substantially identical to a representation or
warranty breached by the Servicer, the Servicer shall first proceed against
the Seller. If the Seller does not within 60 days
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after notification of the breach, take steps to cure such breach or purchase
or substitute for the Mortgage Loan, the Servicer shall cure such breach or
purchase the Mortgage Loan from the Trust as provided in this Section
2.06(a)(2).
(3) The Company Breach. Within 90 days after the earlier of discovery or
receipt of notice by the Company of the breach of any of its representations
or warranties set forth in Section 2.05 above with respect to any Asset,
which breach materially and adversely affects the value of the Asset or the
interest of the Trust therein (it being understood that any such breach
shall be deemed to have materially and adversely affected the value of the
related Asset or the interest of the Trust therein if the Trust incurs a
loss as a result of such defect or breach), the Company shall (i) cure such
breach in all material respects, (ii) purchase the Asset from the Trustee,
or (iii) remove such Asset from the Trust (in which case it shall become a
Replaced Asset) and substitute one or more Qualified Substitute Assets in
the manner and subject to the limitations set forth in Section 2.06(g)
below. Notwithstanding the foregoing, however, if such breach is a
Qualification Defect and one or more REMIC elections have been made with
respect to the related Trust, such cure, purchase or substitution must take
place within 75 days of the Defect Discovery Date.
(b) Failure to Retitle Manufactured Homes. Upon the occurrence of either of
the following events:
(1) the rendering of judgment by a court of competent jurisdiction that
the Trustee does not have a perfected first-priority security interest in a
particular Manufactured Home because the Seller has not caused notations to
be made on any certificate or other document of title relating to such
Manufactured Home or has not executed any transfer instrument (including any
UCC financing statement or UCC-3 assignment) relating to such Manufactured
Home, or
(2) the Servicer's receipt of written advice of counsel selected by the
Servicer from among the counsel used by the Servicer in the ordinary course
of its business to the effect that a court of competent jurisdiction sitting
in a jurisdiction in which some of the Manufactured Homes underlying the
Contracts are located has held that, solely because of the failure of a
pledgor or assignor of manufactured housing contracts (whose pledgee or
assignee has perfected its security interest in such contracts) to cause
notations to be made on any certificate or other document of title relating
to a manufactured home underlying the pledged contracts or to execute any
transfer instrument (including any UCC financing statement or UCC-3
assignment) relating to any such manufactured home, a perfected
first-priority security interest was not created in a manufactured home
underlying such contracts located in such jurisdiction in favor of the
pledgee or assignee,
then the Servicer, at the expense of the Seller, must complete all appropriate
remedial action with respect to the affected Manufactured Home(s) within 180
days after the Servicer's receipt of written notice of such judgment or of such
written advice. If the Servicer fails to complete all such remedial action with
respect to any affected Manufactured Home within such 180-day period, the Seller
must repurchase each related Contract at the Repurchase Price therefor on or
before the last Business Day of the Prepayment Period ending on or immediately
after the expiration of such 180-day period in accordance with Section 2.05(f)
below.
In connection with the foregoing obligation, the Servicer shall have no
obligation on an ongoing basis to seek any advice of counsel with respect to the
matters described in clause (2) of the preceding
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paragraph. However, the Servicer shall seek advice with respect to such matters
whenever information comes to the attention of any of its executive officers
which causes such executive officer to determine that a holding of the type
described in such clause (2) might exist.
(c) Assignment Failure. If an Assignment to the Trustee of the Seller's
interest in a Mortgage securing a Mortgage Loan has not been recorded within one
year after the Closing Date for the related Series of Certificates (or in the
case of Mortgage Loans for which recordation of an Assignment was initially
waived but subsequently required pursuant to Section 2.03(a) hereof, within one
year after the Trustee's delivery of the Assignment to the Servicer for
recordation), (1) the Seller shall purchase the related Mortgage Loan from the
Trustee or (2) if there have been no defaults in the Monthly Payments on such
Mortgage Loan, the Seller shall deposit an amount equal to the Repurchase Price
therefor into an escrow account maintained by the Trustee (which account shall
not be an asset of the Trust or any REMIC), or shall enforce the related
Seller's obligation under its Sales Agreement to make such purchase or deposit.
Any such amounts deposited to an escrow account, plus any earnings thereon,
shall (A) be released to the Seller, as the case may be, upon receipt by the
Trustee of satisfactory evidence that the Assignment has been recorded in the
name of the Trustee or (B) be applied to purchase the related Mortgage Loan in
the event that the Servicer notifies the Trustee that there has been a default
thereon. Any amounts in the escrow account may be invested in Eligible
Investments at the written direction of the Seller.
(d) Optional Purchase by Servicer of Defaulted Contracts. At any time after
a Contract has become and remains a Defaulted Contract, the Servicer may, at its
option, purchase such Defaulted Contract from the Trust at the Repurchase Price
therefor in accordance with Section 2.06(f) below.
(e) Manner of Repurchase. Any Asset purchased pursuant to Section 2.05(a),
(b), (c), (d) or (e) hereof shall be purchased at the Repurchase Price for such
Asset. The Seller, the Company or the Servicer, as appropriate (any of the
foregoing, a "Repurchaser"), shall deposit into the Certificate Account, on the
date of purchase, the Repurchase Price for each Asset to be purchased. Upon such
deposit and upon being provided by the Repurchaser with appropriate instruments
of transfer or assignment, the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the Repurchaser any Asset purchased hereunder, and the
Trustee shall deliver to the Repurchaser any Asset Documents relating to the
repurchased Asset that are in the Trustee's possession, whereupon the Trustee
shall have no further responsibility with regard to such Asset. Except as
provided in this Section 2.06(f), if a Repurchaser shall, in accordance with the
foregoing, purchase any Asset required by it to be purchased, neither the
Trustee nor any Certificateholder shall have any other remedy against such
Repurchaser based on any misrepresentation or breach of covenant or warranty of
such Repurchaser with respect to or resulting from any such Asset.
The Servicer will be responsible for determining the Repurchase Price for
any Asset (and the related Basis Limit Amount for any Converted Loan) to be
repurchased pursuant to this Section 2.06 and shall certify such amounts to the
Trustee at the time of any such purchase. If, for whatever reason, the Servicer
shall certify to the Trustee that there is a miscalculation of the amount to be
paid to the Trust, the Trustee shall from monies in the Distribution Account
return any overpayment that the Trust received as a result of such
miscalculation to the applicable Repurchaser upon the discovery of such
overpayment, and the Servicer shall collect from the applicable Repurchaser for
payment to the Trustee any underpayment that resulted from such miscalculation
upon the discovery of such underpayment. Recovery may be made either directly or
by set-off of all or any part of such underpayment against amounts owed by the
Trust to such Repurchaser.
Any Repurchaser shall indemnify and hold harmless the Trustee from and
against any and all losses or liabilities incurred by the Trustee (including any
such losses or liabilities arising from third-
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party claims) with respect to or resulting from any repurchase hereunder.
(f) Manner of Substitution. Unless otherwise provided in the Pooling and
Servicing Agreement, the right to substitute a Qualified Substitute Asset for
any Replaced Asset that is an asset of the Trust shall be limited to (1) in the
case of substitutions pursuant to Section 2.06(a) or 2.06(c), the two-year
period beginning on the Closing Date and (2) in the case of any other
substitution, the three-month period beginning on the Closing Date.
As to any Replaced Asset for which the Company or the Seller substitutes a
Qualified Substitute Asset or Assets, the Company or the Seller, as the case
may be, shall effect such substitution by delivering to the Trustee for such
Qualified Substitute Asset or Assets a complete Contract File or Trustee
Mortgage Loan File, as appropriate, together with an Officer's Certificate of
the Company or the Seller, as the case may be, to the effect that each such
Qualified Substitute Asset complies with the terms of the Pooling and
Servicing Agreement. Monthly Payments due with respect to Qualified Substitute
Assets in the month of substitution are not part of the Trust and will be
retained by the Company or the Seller, as the case may be. For the month of
substitution, distributions to Certificateholders will reflect the Monthly
Payment due on such Replaced Asset during the month in which the substitution
occurs, and the Company or the Seller, as the case may be, shall thereafter be
entitled to retain all amounts subsequently received in respect of such
Replaced Asset. The Servicer shall amend the Asset Schedule to reflect the
removal of such Replaced Asset from the terms of the Pooling and Servicing
Agreement and the substitution of the Qualified Substitute Asset or Assets.
Upon such substitution, such Qualified Substitute Asset or Assets shall be
subject to the terms of the Pooling and Servicing Agreement in all respects,
including, in the case of a substitution effected by the Seller, the
representations and warranties included in the related Sales Agreement, and in
the case of a substitution effected by the Company, the representations and
warranties set forth in Section 2.05 above, in each case as of the date of
substitution. The Trustee shall, within five Business Days of its receipt of
the documents referred to above, effect the reconveyance of such Replaced
Asset to the Company or the Seller, as the case may be, in accordance with
the procedures specified above.
For any month in which the Company or the Seller substitutes one or more
Qualified Substitute Assets for one or more Replaced Assets, the Servicer will
determine and notify the Trustee with respect to the amount (if any) by which
the aggregate Unpaid Principal Balance of all such Qualified Substitute Assets
as of the date of substitution is less than the aggregate Unpaid Principal
Balance of all such Replaced Assets (after application of Monthly Payments due
in the month of substitution) (the "Substitution Shortfall"). On the date of
such substitution, the Company or the Seller, as the case may be, will deliver
or cause to be delivered to the Trustee for deposit from its own funds into the
Distribution Account an amount equal to the Substitution Shortfall.
(g) Qualification Defect. If any Person required to cure, purchase, or
substitute under Section 2.06(a) above for an Asset affected by a Qualification
Defect fails to perform within the time limit set forth in those subsections,
the Trustee shall dispose of such an Asset in such manner and for such price as
the Servicer advises the Trustee are appropriate, provided that the removal of
such Asset occurs no later than the 90th day from the Defect Discovery Date. It
is the express intent of the parties that an Asset affected by a Qualification
Defect be removed from the Trust before the 90th day from the Defect Discovery
Date so that the related REMIC or Pooling REMIC will continue to qualify as a
REMIC. Accordingly, the Trustee is not required to sell an affected Asset for
its fair market value nor shall the Trustee be required to make up any shortfall
resulting from the sale of such Asset. The person failing to perform under
Section 2.06(a) above shall be liable to the Trust for (1) any difference
between (A) the Unpaid Principal Balance plus accrued and unpaid interest
thereon at the applicable Asset Rate to the date of disposition and (B) the net
amount received by the Trustee from the disposition (after the payment of
related expenses), (2) interest on such difference at the Asset Rate from the
date of disposition to the date of payment and (3) any legal and other expenses
incurred by or on behalf of the
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Trust in seeking such payments. Except where the Servicer is the person failing
to perform, the Servicer shall pursue the legal remedies of the Trust on the
Trust's behalf and the Trust shall reimburse the Servicer for any legal or other
expenses of the Servicer related to such pursuit not recovered from such person.
If the Servicer is the person failing to perform, the Trustee shall pursue the
Trust's legal remedies against the Servicer and the Trust shall reimburse the
Trustee for its related legal or other expenses.
(h) Notices. Any person required under this Section 2.06 to give notice or
to make a request of another person to give notice shall give such notice or
make such request promptly.
ARTICLE III
ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS
Section 3.01. The Servicer.
The Servicer agrees to service the Assets for and on behalf of the Trustee
and its successors and assigns, and otherwise to perform and carry out the
duties, responsibilities and obligations that are to be performed and carried
out by the Servicer under the Pooling and Servicing Agreement. The Servicer
shall service the Contracts in accordance with the customary and usual
procedures of responsible financial institutions that service manufactured
housing retail installment sales contracts and installment loan agreements for
manufactured housing units located in the jurisdictions in which the
Manufactured Homes are located, except as otherwise expressly provided by the
Pooling and Servicing Agreement; PROVIDED, HOWEVER, that the Servicer shall not
release or waive its right to collect the unpaid principal balance of any
Contract. The Servicer shall service the Mortgage Loans (a) generally in
compliance with FNMA standards and (b) in a manner that is consistent with
prudent residential mortgage loan servicing standards generally accepted within
the residential mortgage loan servicing industry. The manner in which the
Servicer services the Assets shall be consistent with the manner in which the
Servicer services all manufactured housing retail installment sales contracts
and residential mortgage loans in its servicing portfolio, except for any
differences specifically required by the Pooling and Servicing Agreement. The
Servicer shall have full power and authority consistent with the aforementioned
standards, acting alone and/or through agents and designees as permitted by
Section 6.07 hereof, to do any and all things it may deem necessary or desirable
in connection with such servicing and administration; PROVIDED, HOWEVER, that to
the extent the Servicer is prohibited by any applicable rule, regulation,
judicial or administrative determination or other order applicable to it from
carrying out any of its obligations or duties provided for herein or in any
document contemplated herein, such failure shall not constitute a breach of this
Agreement.
Section 3.02. Maintenance of Records; Inspection of Asset Files.
(a) The Servicer shall retain all data relating directly to or maintained in
connection with the servicing of the Assets for any Series at the address of the
Servicer set forth in Section 11.04 hereof or at such other place where the
servicing offices of the Servicer are located.
The Servicer shall permit the Trustee or any authorized agent of the Trustee
reasonable access, upon prior written notice to the Servicer, during the
Servicer's normal business hours, to the Asset Files, the Servicer Files, and
the Servicer's other records, if any, relating to the Assets for any related
Series. Any such examination of such files or records will be conducted in a
manner that does not unreasonably interfere with the Servicer's normal
operations or customer or employee relations. Without otherwise
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limiting the scope of the examination the Trustee may make, the Trustee or its
authorized agents, using generally accepted audit procedures, may in their
discretion verify the status of each Asset and review the records relating
thereto for conformity to Remittance Reports prepared pursuant to Article IV
hereof and compliance with the standards represented to exist as to each Asset
in the Pooling and Servicing Agreement.
(b) At all times during the term hereof, the Servicer shall keep available a
copy of the Asset Schedule at its principal executive office for inspection by
Certificateholders.
(c) On or before the date of the Servicer's delivery of the Remittance
Report to the Trustee in any month, the Servicer will, upon the written request
of the Trustee, provide to the Trustee a list of outstanding Assets, setting
forth the Scheduled Principal Balance of each such Asset as of the preceding
Distribution Date.
(d) Notwithstanding the provisions of this Section 3.02, the Trustee shall
at no time have any duty or obligation to examine any records of the Servicer or
to recalculate or otherwise verify the accuracy of any certificate or report
prepared by the Servicer, and no implied duty to do so shall be asserted against
the Trustee.
(e) On or before the Closing Date for a Series, the Servicer shall deliver
to the Trustee a list of Officers of the Servicer (each a "Servicing Officer")
involved in, or responsible for, the administration and servicing of the Assets
underlying such Series, which list shall be amended from time to time as
necessary by the Servicer by delivery of an amended list of Servicing Officers
to the Trustee.
Section 3.03. Collection of Payments on Assets; Servicing Delinquent Accounts.
(a) Continuously from the Cut-off Date until the earliest to occur of the
following with respect to each Asset sold to the Trust in connection with the
issuance of the Certificates: (i) the principal and interest on such Asset are
paid in full, (ii) such Asset is foreclosed and the related Manufactured Home or
Mortgaged Property is liquidated pursuant to Section 3.08 hereof, (iii) all of
the proceeds of a liquidating claim under the Standard Hazard Insurance Policy
relating to such Asset have been deposited to the Certificate Account, or (iv)
the Liquidation Proceeds relating to such Asset have been deposited to the
Certificate Account, the Servicer will proceed diligently and in a manner
consistent with its standards for servicing Assets described in Section 3.01
above, to collect all payments due under each Asset when such payments become
due and payable and to apply such payments in accordance with Sections 3.05,
3.06 and 3.07 hereof.
(b) The Servicer shall have reasonable discretion to extend appropriate
relief to Obligors who encounter hardship and who are cooperative and
demonstrate proper regard for their obligations. The Servicer may arrange with
such an Obligor to extend the payment schedule for the related Asset; provided,
however, that any such extension must be made in accordance with the Servicer's
standards for servicing Assets described in Section 3.01 above; and provided
further, that no such extensions may be made except to the extent (1) that the
Servicer has determined, in its reasonable judgment, that the Obligor is in
default or that default is reasonably foreseeable with respect to such Asset in
the absence of such relief, (2) that the Due Date for the final Monthly Payment
on such Asset is not extended beyond the latest Final Scheduled Distribution
Date for the related Series and (3) that the grant of such extension is
otherwise permissible under Section 10.02 hereof and the REMIC Provisions as in
effect at the time of such extension, as evidenced by an Opinion of Counsel
delivered by the Servicer to the Trustee. Where the Obligor is in default on an
Asset notwithstanding such relief and the Servicer has exhausted all reasonable
means of inducing the Obligor to pay on a timely basis, the Servicer shall begin
acceleration
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of the Assets in accordance with its terms and applicable laws.
Section 3.04. Advances.
(a) Servicing Advances. If any Obligor is in default in the payment of
premiums on its Standard Hazard Insurance Policy or Policies, the Servicer may
pay such premiums or taxes out of its own funds. If any Obligor is in default in
the payment of premiums on its Standard Hazard Insurance Policy or Policies and
coverage is not provided in respect of the related Asset under a blanket policy
maintained by the Servicer pursuant to Section 3.16(a) below, or if any Obligor
is in default in the payment of personal property taxes or real estate taxes due
in respect of its Manufactured Home or Mortgaged Property, the Servicer shall
pay such premiums or taxes out of its own funds in a timely manner, as Servicing
Advances, unless the Servicer, in its reasonable judgment, determines that any
such Servicing Advance would be a Non-Recoverable Advance. In addition, the
Servicer shall pay in a timely manner, as Servicing Advances, any and all
personal property taxes and real estate taxes due in respect of any Repo
Property or REO Property it holds on behalf of the Trust and all premiums for
any Standard Hazard Insurance Policy maintained for such Repo Property or REO
Property (except as similar coverage may be provided under a blanket policy
maintained by the Servicer pursuant to Section 3.16 below) unless the Servicer,
in its reasonable judgment, determines that any such Servicing Advance would be
a Non-Recoverable Advance.
(b) P&I Advances. If any Obligor fails to make its Monthly Payment by the
Remittance Date, the Servicer shall deposit such amount in the Distribution
Account on or before such Remittance Date, as a "P&I Advance," unless the
Servicer, in its reasonable judgment, determines that any such P&I Advance would
be a Non-Recoverable Advance, or such Monthly Payment can be offset by Early
Payments, as provided in Section 3.07(c) hereof. In addition, if the Certificate
Account is maintained with the Trustee, the Servicer may instruct the Trustee to
use any investment earnings on such account to defray its P&I Advance
obligation, and the Trustee shall honor any such instructions (including
standing instructions).
(c) Recovery of Advances. The Servicer shall be entitled to reimbursement
for any Advances made by it in respect of any Asset out of late collections from
the related Obligor or from Insurance Proceeds, Liquidation Proceeds or a
Repurchase Price recovered by it in respect of such Asset ("Related Proceeds")
and shall be entitled to reimburse itself for unreimbursed Advances made that
have become Non-Recoverable Advances in accordance with Section 3.07(a)(1)
below. (d) Non-Recoverable Advances. If the Servicer does not make an Advance on
the grounds that it is a Non-Recoverable Advance, or if an Advance previously
made by the Servicer is determined by the Servicer to have become a
Non-Recoverable Advance, then the Servicer shall provide the Trustee with an
Officer's Certificate stating this fact and stating the basis upon which the
Servicer determined that such Advance would be or was a Non-Recoverable Advance.
The Trustee shall not be responsible for determining whether any such
determination was reasonable.
Section 3.05. Servicing Account.
Within one Business Day after the Servicer's receipt of any amounts
collected on any Asset in its lock box maintained for the collection of amounts
payable under contracts serviced by it (including Net Liquidation Proceeds,
Insurance Proceeds and Repurchase Prices in respect thereof), the Servicer shall
deposit such collections, or cause such collections to be deposited, into a
clearing account established by the Servicer (the "Servicing Account"), which
shall be an Eligible Account. The Servicer may use the Servicing Account for
collection of payments on Assets underlying more than one Series and for assets
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that are not the subject of any transaction covered by a Pooling and Servicing
Agreement; provided, that in any such event, the Servicer shall cause separate
accounting and records to be maintained within the Servicing Account with
respect to the Assets underlying each separate Series. Furthermore, the parties
hereto agree that all amounts deposited into the Servicing Account in respect of
the Assets, other than amounts payable to the Servicer as servicing compensation
under the Pooling and Servicing Agreement, are to be held in trust for the
exclusive use and benefit of the related Trust.
Section 3.06. Certificate Account.
(a) On or before the Closing Date, the Trustee shall establish a collection
account or accounts (the "Certificate Account"), which must be an Eligible
Account. The Certificate Account is to be held by or for the benefit of the
Trustee on behalf of the Certificateholders, and shall be either in the
Trustee's name or designated in a manner that reflects the custodial nature of
the account and that all funds in such account are held for the benefit of the
Trustee. The Trustee shall use a segregated Certificate Account for each Series
of Certificates, and the Servicer shall cause separate accounting and records to
be maintained with respect to each separate Series.
(b) The Servicer shall deposit into the appropriate Certificate Account on a
daily basis, and in no event later than two Business Days following deposit
thereof to the Servicing Account after the Servicer's collection thereof, all
payments and collections received by it on each Outstanding Asset on or after
the effective date of the related Pooling and Servicing Agreement (including Net
Liquidation Proceeds, Insurance Proceeds and Repurchase Prices in respect
thereof), except amounts collected in respect of Monthly Payments due on or
prior to the Cut-off Date. On or prior to the Closing Date, the Servicer shall
deposit into the Certificate Account all installments of principal and interest
due on the Assets after the Cut-off Date and received by the Servicer prior to
the Closing Date, plus each Principal Prepayment of any Asset (including any
related payment of interest) received by the Servicer on or after the Cut-off
Date but prior to the Closing Date.
(c) Amounts on deposit in the Certificate Account may be invested at the
direction of the Servicer in Eligible Investments, and earnings on amounts
deposited in such account shall be credited to the account of the Servicer as
servicing compensation in addition to the Servicing Fee and shall offset P&I
Advances due from the Servicer in respect of the Distribution Date next
succeeding the date on which such earnings were made or, in the alternative at
the Servicer's option, may be released to the Servicer on such Distribution
Date. The amount of any losses incurred in respect of any such investments shall
be deposited in the Certificate Account by the Servicer out of its own funds
immediately upon realization of any such losses.
Section 3.07. Withdrawals From Certificate Account; Remittance Amounts.
(a) Withdrawals from Certificate Account. The Servicer may withdraw funds on
deposit in the Certificate Account for the following purposes:
(1) to reimburse itself for any Advances previously made by
the Servicer, which Advances remain unreimbursed to the Servicer, out
of Related Proceeds or, if such Advances have been determined by the
Servicer to have become Non-Recoverable Advances, out of any funds on
deposit in the Certificate Account;
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(2) to pay any Servicing Fees and other servicing compensation
provided for herein due to the Servicer; PROVIDED, HOWEVER, that if OAC
is the Servicer, it shall only be entitled to withdraw its Servicing
Fee in respect of any Distribution Date from the Certificate Account in
accordance with this clause to the extent the amounts on deposit in the
Certificate Account and attributable to the Available Distribution
Amount for such Distribution Date exceed the sum of all amounts to be
distributed on the Certificates of the related Series on such
Distribution Date prior to the distribution to OAC of its Servicing
Fees as described in the related Pooling and Servicing Agreement in the
Section thereof entitled "Distributions"; and
(3) to enable the Servicer to remit the Remittance Amount to
the Trustee on each Remittance Date, as described in Section 3.07(b)
below.
(b) Remittance Dates. On or prior to the Remittance Date for any
Distribution Date, the Servicer shall remit the Remittance Amount for such
Distribution Date to the Trustee, from and to the extent of the funds in the
Certificate Account, plus all required P&I Advances, by wire transfer or
otherwise, in immediately available funds, for deposit into the Distribution
Account. If the Certificate Account is maintained by the Trustee, on each
Remittance Date, the Servicer shall notify the Trustee as to the amount of the
related Remittance Amount and the amount of all required P&I Advances to be
covered by investment earnings on the Certificate Account, and the Trustee shall
transfer such amount from the Certificate Account to the Distribution Account on
the related Distribution Date. In such event, the Servicer shall still remit any
P&I Advances not covered by investment earnings on the Certificate Account to
the Trustee for deposit into the Distribution Account on the Remittance Date.
Notwithstanding the foregoing, if a Terminating Purchase is to be made on
such Distribution Date, and the Servicer shall have received the Termination
Price or shall be the Terminator, the Servicer shall remit the Termination Price
rather than the Remittance Amount to the Trustee for deposit into the
Distribution Account.
(c) Treatment of Early Payments. Early Payments received by the Servicer
shall be retained in the Certificate Account and transferred to the Distribution
Account when and as if such Early Payments had otherwise been received by the
Servicer as scheduled payments under the Assets. However, Early Payments on any
Assets for a Series on deposit in the Certificate Account that are not yet due
to be passed through to Certificateholders on any Distribution Date may be
remitted to the Distribution Account to offset delinquencies on other Assets for
the same Series. If Early Payments on any Asset are used to offset delinquencies
on other Assets, subsequent late recoveries of such delinquent amounts on such
other Assets shall be treated by the Servicer as a restoration of the Early
Payments used to offset such delinquent amounts and shall be deposited into the
Certificate Account in accordance with Section 3.06(a) hereof. The Servicer
shall maintain records with respect to its application of Early Payments.
Section 3.08. Realization upon Defaulted Assets.
(a) The Servicer shall repossess, foreclose upon or otherwise comparably
convert the ownership of any Manufactured Home and any related Real Property and
any Mortgaged Property securing an Asset that comes into and continues in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.03 hereof. In connection with such
repossession, foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual for responsible holders of retail installment sales contracts
and installment loan agreements for manufactured housing
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(in the case of defaulted Contracts) and for responsible holders of residential,
one- to four-family mortgage loans (in the case of defaulted Mortgage Loans) and
as shall be in compliance with all applicable laws; PROVIDED, that such
practices and procedures shall be, in all circumstances, undertaken with a view
toward maximizing the amount of principal and interest recovered on the Assets.
(b) The Servicer may commence and prosecute any Proceedings in respect of
any Asset in default in its own name on behalf of the Trustee or, if the
Servicer deems it necessary, in the name of the Trustee. If the Servicer elects
to commence a Proceeding to enforce an Asset, the act of commencement shall be
deemed to entail an automatic assignment of the Asset to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding in which the Servicer seeks to collect payments due on any Asset, it
is held that the Servicer lacks standing to enforce an Asset (or otherwise is
not permitted to enforce an Asset) on the grounds that it is not a real party in
interest or a holder entitled to enforce the Asset, the Trustee, on behalf of
the Certificateholders, shall take such steps as the Servicer deems necessary to
enforce the Asset, including bringing suit in its name or in the names of the
Certificateholders. Any such action by the Trustee shall be taken at the
Servicer's expense, but such expenses (including, without limitation, attorneys'
fees) shall be deemed Liquidation Expenses which the Servicer shall have no
obligation to incur to the extent it makes a good faith determination that such
Liquidation Expenses will not be recoverable out of Liquidation Proceeds of the
related Asset.
(c) In seeking to enforce the Assets, the Servicer may exercise any rights
of recourse against guarantors or sureties of any Obligor's obligations (or
against any other third parties against whom any rights of recourse exist in
connection with any Asset).
(d) The Servicer's obligations under this Section are subject to the proviso
that, in the case of damage to a Manufactured Home or a Real Property or a
Mortgaged Property, the Servicer shall not be required to expend its own funds
in making Liquidation Expenses to restore such property unless it shall
determine, in its reasonable judgment, (1) that such restoration will increase
the proceeds of liquidation of the related Asset, after reimbursement to the
Servicer for such expenses, and (2) that such Liquidation Expenses, if made,
will be recoverable out of Liquidation Proceeds of such Asset. If the Servicer
recovers any Insurance Proceeds or Liquidation Proceeds in respect of any Asset,
the Servicer may deduct the amount of any Insured Expenses and unreimbursed
Liquidation Expenses incurred by it in respect of such Asset from such gross
Insurance Proceeds and Liquidation Proceeds, respectively, prior to deposit of
such proceeds into the Certificate Account.
(e) Notwithstanding any of the foregoing, the Servicer shall not repossess,
foreclose upon or otherwise comparably convert the ownership of any Manufactured
Home, Real Property or Mortgaged Property securing an Asset in cases where the
Servicer has actual knowledge that the Manufactured Home, Real Property or
Mortgaged Property is situated on a toxic waste site as determined by the United
States Environmental Protection Agency or other comparable federal or state
agency and where, in the good faith judgment of the Servicer, the liabilities
that would be imposed upon the Trust with respect to such toxic waste site would
exceed the Net Liquidation Proceeds that could be realized upon liquidation of
the related Asset. The Servicer shall have no affirmative duty or obligation to
determine whether any Manufactured Home, Real Property or Mortgaged Property is
situated on a toxic waste site.
Section 3.09. Title, Conservation, and Disposition of Repo Property and REO
Property.
(a) The Servicer shall maintain, protect, and insure any Repo Property or
REO Property acquired pursuant to Section 3.08 hereof, on behalf of the Trust,
in accordance with standard industry practice solely for the purpose of its
prompt disposition and sale and with a view toward maximizing
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the amount of principal and interest recovered on the Assets. During any period
in which the Trust holds a Repo Property or REO Property, the Servicer shall not
(1) lease the Repo Property or REO Property, (2) authorize or permit any
construction on the Repo Property or REO Property, other than the completion of
a building or improvement thereon, and then only if more than 10% of the
construction of such building or other improvement was completed before default
on the related Asset became imminent, all within the meaning of section
856(e)(4)(B) of the Code, or (3) allow the Repo Property or REO Property to be
used in any trade or business conducted by the Trust. If one or more REMIC
elections are made with respect to the assets of the Trust, the Servicer shall
use its best efforts to dispose of such Repo Property or REO Property for its
fair market value within 22 months after its acquisition by the Trust pursuant
to the Servicer's ordinary commercial practices. If the Servicer is unable to
sell such Repo Property or REO Property in the course of its ordinary commercial
practices within that 22-month period, the Servicer shall (a) purchase such Repo
Property or REO Property at a price equal to such Repo Property's or REO
Property's fair market value or (b) auction such Repo Property or REO Property
to the highest bidder in an auction reasonably designed to produce a fair price
(an "Auction") that takes place within one month after the end of the 22-month
period. If the Servicer and the Trustee either (1) receive an Opinion of Counsel
indicating that, under then-current law, the REMIC may hold Repo Property or REO
Property associated with a REMIC Asset for a period longer than two years
without threatening the REMIC status of any related REMIC or causing the
imposition of a tax upon any such REMIC or (2) the Servicer applies for and is
granted an extension of such 22-month period pursuant to Code sections
860G(a)(8) and 856(e)(3) (the applicable period provided pursuant to such
Opinion of Counsel or such Code section being referred to herein as an "Extended
Holding Period"), upon the direction of the Company or the Trustee, the Servicer
shall continue to attempt to sell such Repo Property or REO Property pursuant to
its ordinary commercial practices until the date two months prior to the
expiration of the Extended Holding Period. If no REMIC election has been made or
is to be made with respect to the assets of the Trust, the 22-month period for
disposing of any Repo Property or REO Property as described in the preceding two
sentences shall be an eleven-month period. The Servicer shall either sell any
Repo Property or REO Property remaining after such date in an Auction or
purchase such Repo Property or REO Property (at the price set forth in this
paragraph) before the end of the Extended Holding Period. In the event of any
such sale of a Repo Property or REO Property, the Trustee shall, at the written
request of the Servicer and upon being supplied with appropriate forms therefor,
within five Business Days after its receipt of the proceeds of such sale or
auction, instruct the Servicer to release to the purchaser the related Contract
File and Servicer Contract File (in the case of a Repo Property), and the
Trustee shall release to the purchaser the related Trustee Mortgage Loan File
and shall instruct the Servicer to release to the purchaser the related Servicer
Mortgage Loan File (in the case of a Mortgage Loan), and in any event the
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as shall be necessary to vest in the auction
purchaser title to the Repo Property or REO Property, and shall deliver to such
purchaser any Asset Documents relating to such Contract that are in the
Trustee's possession, whereupon the Trustee shall have no further responsibility
with regard to any related Asset File or Servicer File. Neither the Trustee nor
the Servicer, acting on behalf of the Trust, shall provide financing from such
Trust to any purchaser of a Repo Property or REO Property.
(b) In the event that title to any Real Property or REO Property is
acquired, the deed or certificate of sale shall be issued to the Trustee for the
benefit of the Certificateholders. The Servicer shall, in accordance with
Section 3.09(a), use its reasonable efforts to sell any Repo Property or REO
Property as expeditiously as possible, but in all events within the time period,
and subject to the conditions set forth in Section 3.09(a) hereof. Pursuant to
its efforts to sell such Repo Property or REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
such Repo Property or REO Property in the same manner and to such extent as it
customarily does in connection with its own repossessed manufactured homes or
mortgaged properties (as applicable), incident to its conservation and
protection of the interests of the Certificateholders.
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(c) The Servicer shall deposit all net funds collected and received in
connection with the operation of any Repo Property or REO Property in the
applicable Certificate Account no later than the second Business Day following
receipt of such funds.
(d) The Servicer, upon the final disposition of any Repo Property or REO
Property, shall be entitled to reimbursement of any related unreimbursed
Advances related to the Asset for such Repo Property or REO Property as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such Repo Property or REO Property, the latter in
accordance with the Sections of the related Pooling and Servicing Agreement that
are entitled "Distributions" and "Limited Right of Servicer to Retain Servicing
Fees from Collections."
(e) The final disposition of any Repo Property or REO Property shall be
carried out by the Servicer at the Repo Property's or REO Property's fair market
value under the circumstances existing at the time of disposition and upon such
terms and conditions as the Servicer shall deem necessary or advisable, and as
are in accordance with accepted servicing practices and in accordance with
Section 3.09(a) above.
(f) The Liquidation Proceeds from the final disposition of any Repo Property
or REO Property shall be deposited into the Certificate Account promptly
following receipt of such Liquidation Proceeds and, subject to such withdrawals
as may be permitted by Section 3.07(a) above, shall be transferred to the
Distribution Account pursuant to Section 3.07(b) above.
(g) The Servicer shall prepare and file reports of foreclosure and
abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, the Servicer,
acting on behalf of the Trustee hereunder, shall not rent, lease, or otherwise
earn income or take any action on behalf of the Trust with respect to any REO
Property that might (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) result in the receipt by any related REMIC of any "income from
non-permitted assets" within the meaning of section 860F(a)(2) of the Code or
any "net income from foreclosure property" within the meaning of section
860G(c)(2) of the Code, both of which types of income are subject to tax under
the REMIC Provisions, unless the Trustee has received an Opinion of Counsel at
the Trust's expense (the costs of which shall be recoverable out of the
applicable Certificate Account), to the effect that, under the REMIC Provisions
and any relevant proposed legislation, any income generated for any related
REMIC by the REO Property would not result in the imposition of a tax upon such
REMIC.
Without limiting the generality of the foregoing, the Servicer shall not:
(i) enter into, renew or extend any New Lease with respect to
any REO Property, if the New Lease by its terms will give rise to any
income that does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other improvement
thereon, and then only if more than ten percent of the construction of
such building or other improvement was completed before default on the
related Mortgage Loan became imminent, all within the meaning of
section 856(e)(4)(B) of the
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Code; or
(iv) Directly Operate, or allow any other Person (other than
an Independent Contractor) to Directly Operate, any REO Property on any
date more than 90 days after its acquisition date;
unless, in any such case, the Servicer has requested and received the Opinion of
Counsel described in the preceding sentence, in which case the Servicer may take
such actions as are specified in such Opinion of Counsel.
(i) The Servicer shall not acquire any personal property relating to any
Asset (other than the related Manufactured Home in connection with a Contract)
pursuant to this Section 3.09 unless either:
(1) such personal property is incident to real property (or to
the related Manufactured Home, in the case of a Contract) (within the
meaning of section 856(e)(1) of the Code) so acquired by the Servicer;
or
(2) the Servicer shall have requested and received an Opinion
of Counsel, at the expense of the Trust (recoverable out of the
Certificate Account), to the effect that the holding of such personal
property by the related REMIC will not cause the imposition of a tax
under the REMIC Provisions on any REMIC related to the Trust or cause
any such REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
Section 3.10. Full Prepayments and Liquidations; Trustee to Cooperate; Release
of Mortgage Files.
(a) Contracts. The Servicer shall determine when a Contract has been paid in
full. Upon the liquidation of any Contract, the Servicer shall remit the
proceeds thereof to the related Certificate Account in accordance with Sections
3.05 and 3.06 above.
The Servicer is authorized to execute an instrument in satisfaction of any
Contract that is the subject of a Principal Prepayment in full, final
liquidation or other payment in full (as well as an instrument in satisfaction
of any related Mortgage) and do such other acts and execute such other documents
as the Servicer deems necessary to discharge the Obligor thereunder and
eliminate the security interest in the Manufactured Home and any Real Property
related thereto. Upon the Servicer's request, the Trustee shall, at the expense
of the Servicer, perform such other acts as are reasonably requested by the
Servicer (including, without limitation, the execution of documents) and
otherwise cooperate with the Servicer in enforcement of rights and remedies with
respect to Contracts. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to a Certificate
Account or Distribution Account.
(b) Mortgage Loans. Upon the liquidation of any Mortgage Loan, the Servicer
shall remit the proceeds thereof to the related Certificate Account in
accordance with Sections 3.05 and 3.06 above and shall deliver to the Trustee a
Request for Release requesting that the Trustee execute such instrument of
release or satisfaction as is necessary to release the related Mortgaged
Property from the lien of the related Mortgage. The Trustee shall, within five
Business Days of its receipt of such a Request for Release, release, or cause
the Custodian to release, the related Trustee Mortgage Loan File to the
Servicer. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to a Certificate Account or
Distribution Account.
From time to time and as appropriate for the servicing
or foreclosure of any Mortgage Loan,
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including but not limited to, collection under any Title Insurance Policy,
Primary Mortgage Insurance Policy, flood insurance policy or Standard Hazard
Insurance Policy or to effect a partial release of any Mortgaged Property from
the lien of the related Mortgage, the Servicer shall deliver to the Trustee a
Request for Release. The Trustee shall, within five Business Days after its
receipt of such Request for Release, release, or cause the Custodian to release,
the related Trustee Mortgage Loan File to the Servicer. Any such Request for
Release shall obligate the Servicer to return each and every document previously
requested from the Trustee Mortgage Loan File to the Trustee by the twenty-first
day following the release thereof, unless (a) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the related Certificate Account or Distribution Account or the
Trustee Mortgage Loan File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Servicer
has delivered to the Trustee a certificate of the Servicer certifying as to the
name and address of the Person to which such Trustee Mortgage Loan File or such
document was delivered and the purpose or purposes of such delivery. Upon
receipt of an Officer's certificate of the Servicer stating that such Mortgage
Loan was liquidated and that all amounts received or to be received in
connection with such liquidation which are required to be deposited into the
applicable Certificate Account or the Distribution Account have been so
deposited, or that such Mortgage Loan has become an REO Property, the Request
for Release shall be released by the Trustee to the Servicer.
(c) Trustee's Execution of Documents in connection with Foreclosures. Upon
written certification of the Servicer, the Trustee shall execute and deliver to
the Servicer court pleadings, requests for trustee's sale or other documents
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or Real Property or to any legal action brought to obtain judgment
against any Obligor on a Mortgage Note, Land Secured Contract or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by such Mortgage Note, Land Secured Contract or Mortgage or otherwise
available at law or in equity. Each such certification shall include a request
that such pleadings or documents be executed by the Trustee and a statement as
to the reason such documents or pleadings are required and that the execution
and delivery thereof by the Trustee will not invalidate or otherwise affect the
lien of the related Mortgage, except for the termination of such a lien upon
completion of the foreclosure proceeding or trustee's sale.
Section 3.11. Maintenance of Security Interests and Other Liens in Manufactured
Homes.
At its own expense, the Servicer shall take such steps as are necessary to
maintain perfection of the security interest in the Seller, the Company or the
Trustee and the validity of any other lien created by each Contract in the
related Manufactured Home to the extent it receives notice of sale or
reregistration of such Manufactured Home. The Trustee hereby authorizes the
Servicer to take such steps as are necessary to reperfect such security interest
in the event of the relocation of a Manufactured Home or for any other reason;
PROVIDED, that nothing in this Section 3.11 shall be construed to limit the
Servicer's obligations under Section 3.12 below.
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Section 3.12. Due-on-Sale Clauses and Assumption Agreements.
Upon learning of any conveyance or prospective conveyance of a Manufactured
Home or Real Property securing any Contract or of a Mortgaged Property securing
any Mortgage Loan, the Servicer may exercise its rights, subject to state law,
under any "due-on-sale" clause of the Contract, Mortgage Note or Mortgage
relating to such Manufactured Home or Mortgaged Property to demand immediate
payment in full of all amounts due under such Contract or Mortgage Loan. With
respect to Mortgage Loans, the Servicer will exercise such rights to the extent,
under the circumstances, and in the manner in which the Servicer enforces such
clauses with respect to other Mortgage Loans held in its portfolio, but will not
exercise such rights if prohibited by law from doing so.
If the Servicer determines not to enforce a "due-on-sale" clause with
respect to an Asset, the Servicer will enter into an assumption and/or
modification agreement with the person to whom the Manufactured Home or
Mortgaged Property has been conveyed in a form that is customary or appropriate
in the Servicer's reasonable business judgment pursuant to which such person
becomes liable under the Asset and pursuant to which, to the extent permitted by
applicable law and deemed appropriate by the Servicer in its reasonable
judgment, the original Obligor remains liable on such Asset; PROVIDED, that (a)
the Servicer reasonably determines that permitting such assumption by such
person will not increase materially the risk of nonpayment of amounts due under
the related Asset, (b) such action is not prohibited by law and will not affect
adversely or jeopardize any coverage under any Insurance Policy required to be
maintained with respect to such Asset pursuant to the Pooling and Servicing
Agreement, (c) neither the Unpaid Principal Balance nor the Asset Rate of the
related Asset may be reduced and (d) if one or more REMIC elections have been
made with respect to the assets of the Trust, no other material term of the
related Asset (including, without limitation, the amortization schedule or any
other term affecting the amount or timing of payments on such Asset) may be
modified without an Opinion of Counsel to the effect that such modification will
not be treated, under the REMIC Provisions, as an acquisition of the modified
Asset by the REMIC in exchange for the unmodified Asset on the date the
modification occurs. The Servicer shall follow its customary underwriting
procedures prior to entering into any such assumption agreement, including,
without limitation, a satisfactory credit review of any Person assuming such
Asset.
Section 3.13.Annual Accountants' Certificate; Annual Statement as to Compliance.
(a) The Servicer shall deliver to the Trustee, on or before December 30 of
each year, with respect to each Pooling and Servicing Agreement that the
Servicer entered into on or before the preceding September 30, an Officer's
Certificate signed by the President or any Vice President of the Servicer, dated
as of September 30 of the preceding year, stating that (1) a review of the
activities of the Servicer during the preceding 12-month period (or since the
Cut-off Date in the case of the first such Officer's Certificate relating to any
Trust) and of its performance under the Pooling and Servicing Agreement has been
made under such Officer's supervision and (2) to the best of such Officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
under the Pooling and Servicing Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such Officer and the nature and status thereof. A copy of such
certificate may be obtained by any other Holder who makes a request in writing
to the Trustee addressed to the Corporate Trust Office.
(b) In addition, on or before December 30 of each year, the Servicer, at its
expense, shall cause a firm of Independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a statement
to the Trustee and each applicable Rating Agency to the effect
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that (1) such firm has audited the financial statements of the Servicer for the
Servicer's most recently ended fiscal year and issued its report thereon; (2)
such audit included tests of the records and documents relating to manufactured
housing installment sale contracts and mortgage loans serviced by the Servicer
for others in accordance with the requirements of the UNIFORM SINGLE ATTESTATION
PROGRAM FOR MORTGAGE BANKERS, or any successor program promulgated by the
accounting profession ("USAP"); and (3) such other statements as are
contemplated under USAP, including, if called for under USAP, a statement as to
whether the Servicer's management's written assertion to such firm (which shall
be attached to the statement of such firm) that its servicing during the
applicable fiscal year complied with USAP's minimum servicing standards in all
material respects is fairly stated in all material respects. The audit tests
referred to in clause (2) of the preceding sentence shall be applied to
manufactured housing installment sale contracts and mortgage loans serviced
under the Pooling and Servicing Agreement and/or, in the sole discretion of such
firm, manufactured housing installment sale contracts and mortgage loans
serviced under pooling and servicing agreements, trust agreements or indentures
substantially similar to the Pooling and Servicing Agreement (hereinafter
referred to as "Pooling Agreements"). For purposes of such statement, such firm
may assume conclusively that all Pooling Agreements under which the Servicer is
the servicer of manufactured housing installment sale contracts and mortgage
loans for a trustee relating to certificates evidencing an interest in
manufactured housing installment sale contracts and mortgage loans are
substantially similar to one another except for any such Pooling Agreement which
by its terms specifically states otherwise.
Section 3.14. Servicing Fees.
As compensation for the services provided for a Series (including servicing
of the related Assets and administration of the related Trust) and ordinary
expenses incurred by the Servicer under the Pooling and Servicing Agreement, on
each Distribution Date the Servicer shall be entitled to receive the Servicing
Fee on each Asset from amounts collected on such Asset. Except as otherwise
expressly provided in the Pooling and Servicing Agreement, the Servicer shall
perform all of the obligations to be performed by it under the Pooling and
Servicing Agreement at its expense and without cost or charge to the Trustee.
The Servicing Fee relating to any Asset shall be payable solely from the
interest portion of each Monthly Payment or other payment of or in respect of
interest collected by the Servicer in respect of such Asset, whether from the
proceeds of any judgment, writ of attachment or levy against the related Obligor
or its assets, or from funds received by the Servicer in connection with any
Principal Prepayment in full, from Insurance Proceeds or Liquidation Proceeds or
in connection with any purchase or repurchase of an Asset; PROVIDED, HOWEVER,
that the Servicing Fee with respect to an Asset in any month shall be payable to
the Servicer out of amounts paid by the related Obligor toward the Monthly
Payment due on such Asset during such month only if the related Obligor has
remitted the entire amount of such Monthly Payment. The Servicer also shall be
entitled to additional servicing compensation as specified in Sections 3.06(c)
and 3.15 hereof. Unless otherwise provided in the Pooling and Servicing
Agreement for a Series, the Servicer may retain its Servicing Fee and any other
servicing compensation provided for in such Pooling and Servicing Agreement from
gross interest collections on the related Assets prior to depositing such
collections into the related Certificate Account.
Section 3.15. Late Charges; Prepayment Fees or Other Charges.
To the extent permitted by law, the Pooling and Servicing Agreement and the
terms of any Asset, the Servicer may collect and retain as additional
compensation any late charges, extension fees or similar fees provided for in
the Asset.
To the extent reasonable and permitted by the terms of any Asset and by law,
the Servicer may collect from the Obligors, and retain as additional
compensation, prepayment fees, assumption fees or
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any fees imposed in connection with the replacement by such Obligor of the
related Standard Hazard Insurance Policy.
Notwithstanding any other provisions of the Pooling and Servicing Agreement,
the Servicer shall not charge or impose upon any Obligor, nor seek to charge or
impose upon any Obligor, or assert a right to receive from any Obligor, any fee,
charge, premium or penalty that, if charged or collected, would violate or
contravene any law, including usury laws, or the terms of the related Asset.
Section 3.16. Maintenance of Standard Hazard Insurance, Primary Mortgage
Insurance, and Errors and Omissions Coverage.
(a) Standard Hazard Insurance. Except as otherwise provided in this Section
3.16(a), the Servicer shall cause to be maintained with respect to each Contract
and Mortgage Loan and each Repo Property and REO Property one or more Standard
Hazard Insurance Policies that provide, at a minimum, the same coverage as that
provided by a standard form fire and extended coverage insurance policy that is
customary for manufactured housing or residential real property (as applicable)
and which shall include flood insurance coverage issued by a Qualified Insurer,
providing coverage in an amount at least equal to the lesser of (1) the maximum
insurable value of the related Manufactured Home or Mortgaged Property or (2)
the principal balance due from the Obligor under such Contract or Mortgage Loan;
PROVIDED, HOWEVER, that in any event the amount of coverage provided by each
Standard Hazard Insurance Policy must be sufficient to avoid the application of
any co-insurance clause contained therein. As part of its collection
responsibilities, the Servicer shall proceed to collect the premiums due on the
Standard Hazard Insurance Policies from the Obligors in accordance with the
degree of skill and care that is customarily used for such purpose in the
manufactured home loan servicing industry (in the case of Contracts) and the
residential mortgage loan servicing industry (in the case of Mortgage Loans).
Each Standard Hazard Insurance Policy caused to be maintained by the Servicer
shall contain a standard loss payee clause in favor of the Servicer and its
successors and assigns. Any amounts received under any such policies shall be
deposited initially into the related Certificate Account and then deposited into
the related Distribution Account pursuant to Sections 3.06 and 3.07 hereof,
within the respective time frames specified in such Sections.
In lieu of causing individual Standard Hazard Insurance Policies to be
maintained with respect to each Manufactured Home and Mortgaged Property
pursuant to subsection (a) of this Section 3.16, the Servicer may maintain one
or more blanket insurance policies, each issued by a Qualified Insurer, covering
losses on the Obligors' interests in the Assets relating to such Manufactured
Homes and Mortgaged Properties resulting from the absence or insufficiency of
such individual Standard Hazard Insurance Policies. The Servicer shall pay the
premium for any such policy on the basis described therein and shall pay any
deductible amount with respect to claims under such policy relating to the
Assets covered thereby. All amounts collected by the Servicer under any such
blanket policy and any payments by the Servicer of deductible amounts
thereunder, in each case relating to an Asset covered thereby, shall be
deposited initially into the Certificate Account pursuant to Sections 3.05 and
3.06 hereof (within the respective time frames specified in such Sections),
after payment to (or retention by) the Servicer of all Insured Expenses and
Liquidation Expenses incurred by it with respect to the Manufactured Home or
Mortgaged Property to which such recovery relates, as well as the amount of any
Advances made by the Servicer with respect to the related Asset that have not
been reimbursed to the Servicer.
(b) Primary Mortgage Insurance. The Servicer must maintain a Primary
Mortgage Insurance Policy in full force and effect on each Mortgage Loan, if
any, which is identified in the related Sales Agreement as being covered by a
Primary Mortgage Insurance Policy. Any such Primary
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Mortgage Insurance Policy must insure the portion of the Unpaid Principal
Balance of the related Mortgage Loan that exceeds 75% of the value of the
related Mortgaged Property (as set forth in the appraisal obtained in connection
with origination of the Mortgage Loan) (the Mortgaged Property's "Initial
Value") unless such Primary Mortgage Insurance coverage has been waived in
writing by the Company at the time it purchases the Mortgage Loan or such
Primary Mortgage Insurance is canceled under the circumstances described below.
If a covered Mortgage Loan provides for negative amortization or the potential
for negative amortization, the Primary Mortgage Insurance Policy must also
insure any increase in the Unpaid Principal Balance of the Mortgage Loan from
the original principal balance of the related Mortgage Note. In the event that
the rating assigned by any Rating Agency for any of the related Certificates to
the claims-paying ability of any related Mortgage Insurer is reduced subsequent
to the issuance of the related Certificates, the Servicer will use its best
efforts to replace each Primary Mortgage Insurance Policy issued by the
downgraded Mortgage Insurer with a new Primary Mortgage Insurance Policy issued
by an insurer whose claims-paying ability is acceptable to the Company. The
premium for any replacement policy shall not exceed the premium for any replaced
policy.
The Servicer may cancel the Primary Mortgage Insurance Policy maintained
with respect to any Mortgage Loan at the related Mortgagor's request if the
following conditions are met:
(1) The current Mortgage Loan-to-Value Ratio of the mortgage
Loan must be 80% or less. The current Mortgage Loan-to-Value Ratio must
be calculated by dividing the Unpaid Principal Balance of the Mortgage
Loan by the Initial Value of the related Mortgaged Property;
(2) The Mortgage Loan may not have been 30 days or more
delinquent at any time within the preceding twelve months; and
(3) There nay not have been any other default under the terms
of the Mortgage Loan at any time during the preceding twelve months.
The Servicer must take all steps necessary to ensure the payment by each
Mortgage Insurer of the maximum benefits available under the terms of the
related Primary Mortgage Insurance Policy. The Servicer must work diligently
with the Mortgage Insurer to determine whether such insurer will settle a claim
under a Primary Mortgage Insurance Policy by taking title to the related
Mortgaged Property or in some other manner. Upon receipt of any proceeds of a
Primary Mortgage Insurance Policy, the Servicer must deposit such proceeds into
the applicable Certificate Account in accordance with Sections 3.05 and 3.06
above.
(c) Errors and Omissions Coverage; Fidelity Bond. The Servicer shall keep in
force throughout the term of the Pooling and Servicing Agreement a policy or
policies of insurance issued by a Qualified Insurer covering errors and
omissions in the performance of its obligations as Servicer hereunder, including
failure to maintain insurance as required by the Pooling and Servicing
Agreement, and a fidelity bond covering the Servicer's performance under the
Pooling and Servicing Agreement. Such policy or policies and bond shall be in
such form and amount as is generally customary among Persons that service a
portfolio of manufactured housing installment sales contracts and installment
loans having an aggregate principal amount of $100 million or more and which
Persons are generally regarded as servicers acceptable to institutional
investors.
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ARTICLE IV
REMITTANCE AND REPORTING TO CERTIFICATEHOLDERS
Section 4.01. Remittance Reports.
On or before the third Business Day prior to each Distribution Date, the
Servicer shall prepare a statement containing the information specified below as
to such Distribution Date (a "Remittance Report") and deliver such statement to
the Trustee. The Trustee shall forward such report to the Certificateholders on
the related Distribution Date, by mail to the addresses of such
Certificateholders as listed in the Certificate Register on the preceding Record
Date. A Remittance Report for a Distribution Date for a Series shall identify
the following items:
(1) the aggregate amount of each of the following, stated
separately, with respect to the related Assets: (A) the amount of all
scheduled principal payments on the Assets relating to such
Distribution Date, (B) the principal components and interest components
of all Monthly Payments made by the Obligors on the Assets during the
related Collection Period, (C) Principal Prepayments (including related
Net Insurance Proceeds) received by the Servicer during the related
Prepayment Period, (D) Liquidation Proceeds (including related
Insurance Proceeds) and Net Liquidation Proceeds (including related Net
Insurance Proceeds) received during the related Prepayment Period, (E)
the amount of any Repurchase Price paid by the Company, the Seller or
the Servicer with respect to any of the Contracts purchased by the
Company, the Seller or the Servicer pursuant to Section 2.06 hereof
during the related Prepayment Period, (F) the aggregate number of Repo
Properties and the aggregate number of REO Properties in the Trust as
of the end of the related Prepayment Period and the aggregate of the
unpaid principal balances of the related Contracts and of the related
Mortgage Loans, respectively, (G) the aggregate number and the
aggregate Unpaid Principal Balance of Outstanding Contracts and
Outstanding Mortgage Loans, stated separately, that are (i) delinquent
one month (i.e., 30 to 59 days) as of the end of the related Prepayment
Period, (ii) delinquent two months (i.e., 60 to 89 days) as of the end
of the related Prepayment Period, (iii) delinquent three months (i.e.,
90 days or longer) as of the end of the related Prepayment Period and
(iv) as to which repossession, foreclosure or other comparable
proceedings have been commenced as of the end of the related Prepayment
Period, (H) the amount of Realized Losses incurred on the Assets during
the related Prepayment Period and on a cumulative basis since the
Cut-off Date (the latter expressed as a dollar amount and as a
percentage of the aggregate Cut-off Date Principal Balance) (separately
identifying any Obligor Bankruptcy Losses, Special Hazard Losses and
Fraud Losses, if they are separately allocated to the related
Certificates) and (I) the aggregate Scheduled Principal Balance of the
Contracts and the Mortgage Loans, stated separately, and the number of
Outstanding Contracts and Mortgage Loans, stated separately, in each
case at the end of the related Collection Period;
(2) the amount of the Available Distribution Amount for such
Distribution Date;
(3) the amount of funds in the Distribution Account, if any,
to be allocated to pay Servicing Fees, to reimburse the Servicer for
Advances made, to reimburse the Company or the Servicer for expenses
pursuant to Section 6.05 hereof, and to refund any overpayment of a
Repurchase Price for an Asset pursuant to Section 2.06(f) hereof;
(4) the amount of the Servicing Fee for the related Collection
Period;
(5) the aggregate amount of P&I Advances required to be made
by the Servicer
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with respect to such Distribution Date, together with a statement of
the amount, if any, of such required P&I Advances that the Servicer
will not make in respect of such Distribution Date and of any P&I
Advances that will not be made because they are Non-Recoverable
Advances;
(6) the aggregate deposits into the Certificate Account
relating to such Distribution Date and the aggregate withdrawals from
the Certificate Account for each category of withdrawal specified in
Section 3.07(a) hereof relating to such Distribution Date;
(7) in the case of a Trust (or designated assets thereof) for
which a REMIC election has been or will be made, any other information
required to be provided to Certificateholders by the REMIC Provisions;
and
(8) any items relating to a specific Series of Certificates
specified in the related Pooling and Servicing Agreement.
The Trustee shall maintain a telephone number which investors may call to
ascertain, on each Distribution Date, the Certificate Principal Balance of each
Class of Certificates and the then-current Pass-Through Rate applicable to each
such Class. Such number for any Series shall initially be as specified in the
Prospectus Supplement for such Series and may only be changed after the Trustee
notes the change in such number in writing on the Remittance Report it sends to
Certificateholders.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall prepare and furnish a statement, from information provided by the
Servicer, containing the information concerning the amount of distributions of
interest and principal on the Regular Certificates and the amount of
distributions on the Residual Certificates, as well as any other information as
may be required by the Code or Regulations and that customarily would be
provided by a Trustee to Certificateholders in order to enable such
Certificateholders to prepare their federal income tax returns, to each Person
who at any time during the calendar year was a Certificateholder that
constituted a retail investor or other Certificateholder that requests such
statement, aggregated for such calendar year or portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.
Section 4.02. Distribution Account.
The Trustee shall establish and maintain a Distribution Account for the
benefit of the Certificateholders and shall deposit therein funds received with
respect to the Remittance Amount for each Distribution Date immediately upon
receipt thereof from the Servicer in accordance with Section 3.07(b) hereof. The
Distribution Account shall be an Eligible Account and shall be either held in
the Trustee's name or designated in a manner that reflects the custodial nature
of the account and that all funds in such account are held in trust for the
benefit of the Trustee.
The Servicer shall keep and maintain separate accounting, on an
Asset-by-Asset basis, for the purpose of justifying any payment to and from the
Distribution Account.
Section 4.03. Allocation of Available Distribution Amount.
On each Distribution Date for a Series, the Trustee shall withdraw all
monies on deposit in the related Distribution Account in accordance with the
related Remittance Report and shall distribute such amounts in the following
order of priority:
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(1) if OAC is not the Servicer, to pay the Servicer its
monthly Servicing Fee, to the extent not previously retained or
withdrawn from the Certificate Account by such Servicer or, if OAC is
the Servicer, to pay OAC its monthly Servicing Fee in respect of a
Distribution Date, but only to the extent that the amounts on deposit
in the Certificate Account and attributable to the Available
Distribution Amount for such Distribution Date exceed the sum of all
amounts to be distributed on the Certificates of the related Series on
such Distribution Date prior to the distribution to OAC of its
Servicing Fee, as described in the related Pooling and Servicing
Agreement in the Section thereof entitled "Distributions";
(2) to reimburse the Servicer from any amounts on deposit in
the Distribution Account for any Advance previously made which has
become a Non-Recoverable Advance, or to reimburse the Servicer for any
other Advance out of Related Proceeds on deposit in the Distribution
Account, in either case to the extent not previously retained or
withdrawn from the Certificate Account by the Servicer;
(3) to reimburse the Company or the Servicer for expenses
incurred by or reimbursable to them pursuant to Section 6.05 hereof;
(4) to refund any overpayment of a Repurchase Price for an
Asset pursuant to Section 2.06(f) hereof; and
(5) to distribute to the Certificateholders (or, if more than
one REMIC election has been made with respect to the Trust, to
distribute to the holders of the Regular Interests and the Residual
Interest in the Pooling REMIC), the amount of the Available
Distribution Amount in accordance with the applicable Pooling and
Servicing Agreement.
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Section 4.04. Compliance with Withholding Requirements.
Notwithstanding any other provisions of the Pooling and Servicing Agreement,
the Trustee shall comply with all federal withholding requirements respecting
payments of interest or principal to the extent of accrued original issue
discount on Certificates to each Holder of such Certificates who (a) is not a
"United States person," within the meaning of Code section 7701(a)(30), (b)
fails to furnish its TIN to the Trustee, (c) furnishes the Trustee an incorrect
TIN, (d) fails to report properly interest and dividends, or (e) under certain
circumstances, fails to provide the Trustee or the Certificateholder's
securities broker with a certified statement, signed under penalties of perjury,
that the TIN provided by such Certificateholder to the Trustee or such broker is
correct and that the Certificateholder is not subject to backup withholding. The
consent of such a Certificateholder shall not be required for such withholding.
In the event the Trustee does withhold the amount of any otherwise required
distribution from interest payments on the Assets (including principal payments
to the extent of accrued original issue discount) or P&I Advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Trustee
shall indicate with any payment to such Certificateholders the amount withheld.
In addition, if any United States federal income tax is due at the time a
Non-U.S. Person transfers a Residual Certificate, the Trustee or other
Withholding Agent may (1) withhold an amount equal to the taxes due upon
disposition of such Residual Certificate from future distributions made with
respect to such Residual Certificate to the transferee thereof (after giving
effect to the withholding of taxes imposed on such transferee), and (2) pay the
withheld amount to the Internal Revenue Service unless satisfactory written
evidence of payment by the transferor of the taxes due has been provided to the
Trustee or such Withholding Agent. Moreover, the Trustee or other Withholding
Agent may (1) hold distributions on a Residual Certificate, without interest,
pending determination of amounts to be withheld, (2) withhold other amounts, if
any, required to be withheld pursuant to United States federal income tax law
from distributions that otherwise would be made to such transferee on each
Residual Certificate that it holds, and (3) pay to the Internal Revenue Service
all such amounts withheld.
Section 4.05. Reports of Certificate Principal Balances to the Clearing Agency.
If and for so long as any Certificate is held by the Clearing Agency, on the
second Business Day before each Distribution Date, the Trustee shall give oral
notice to the Clearing Agency (and shall promptly thereafter confirm in writing)
the following: (a) the amount of interest and principal to be distributed on the
Certificates of such Class on the upcoming Distribution Date, as reported in the
related Remittance Report, (b) the Record Date for such distribution, (c) the
Distribution Date for such distribution and (d) the aggregate Certificate
Principal Balance of each Class of Certificates reported pursuant to clause (10)
of Section 4.01 hereof in such month.
Section 4.06. Preparation of Regulatory Reports.
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(a) Subject to the provisions of subsections (b) and (c) of this Section
4.06, the Servicer shall prepare or cause to be prepared, on behalf of the
Trust, such supplementary and periodic information, documents and reports (such
information, documents or reports are referred to hereinafter as "Periodic
Reports") as may be required pursuant to Section 12(g) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), by the rules
and regulations of the Commission thereunder or as a condition to approval of
any application for relief ("Application for Relief") hereinafter referred to
and, in connection therewith, shall prepare such applications and requests for
exemption and other relief from such provisions as it may deem appropriate. The
Servicer shall be deemed to certify as to each Periodic Report that it conforms
in all material respects to applicable reporting requirements imposed by the
Exchange Act or is otherwise in form and content appropriate for filing with the
Commission. The Servicer is hereby authorized to and shall execute all such
Periodic Reports or Applications for Relief on the Trustee's behalf and file the
same with the Commission and other required filing offices, if any, on behalf of
the Trust.
(b) Within 30 days after the beginning of the first fiscal year of any Trust
during which its obligation to file Periodic Reports pursuant to the Exchange
Act shall have been suspended, the Servicer shall prepare, or cause to be
prepared, a notice on Commission Form 15 ("Form 15") and is hereby authorized to
and shall execute such Form 15 on the related Trustee's behalf; provided,
however, that the Servicer shall be under no obligation to prepare such notice
if the number of Certificateholders exceeds 300. The Servicer shall file any
notice on Form 15 with the Commission in accordance with the provisions of Rule
15d-6 under the Exchange Act.
(c) Notwithstanding any other provision of the Pooling and Servicing
Agreement, the Trustee has not assumed, and shall not by its performance
hereunder be deemed to have assumed, any of the duties or obligations of the
Company or any other Person with respect to (1) the registration of the
Certificates pursuant to the Securities Act, (2) the issuance or sale of the
Certificates, or (3) compliance with the provisions of the Securities Act, the
Exchange Act, or any applicable federal or state securities or other laws
including, without limitation, any requirement to update the registration
statement or prospectus relating to the Certificates in order to render the same
not materially misleading to investors.
(d) In connection with the Servicer's preparation of any Form 15 or of any
Periodic Report, the Trustee shall provide it with information which it may
reasonably request concerning the number and identity of the Holders appearing
on the Certificate Register maintained by the Certificate Registrar, but the
Trustee shall have no duty or obligation to provide information which does not
appear on the Certificate Register, including any information concerning the
ownership of Persons for whom a nominee is the Holder of record.
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ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES
Section 5.01. Pooling REMIC Interests.
If an election has been made to treat certain assets of the Trust as a
Pooling REMIC, the Pooling and Servicing Agreement will set forth the terms of
the Regular Interests and Residual Interest of the Pooling REMIC. Unless
otherwise specified in the Pooling and Servicing Agreement, (a) the Pooling
REMIC Regular Interests will be "regular interests" for purposes of the REMIC
Provisions but will not constitute securities or certificates of interest in the
Trust; and (b) the Trustee will be the owner of any such Regular Interests,
which may not be transferred to any person other than a successor trustee
appointed pursuant to Section 8.08 hereof unless the party desiring the transfer
obtains a Special Tax Opinion.
Section 5.02. The Certificates.
The Certificates shall be designated in the Pooling and Servicing Agreement.
The Certificates in the aggregate will represent the entire beneficial ownership
interest in the Trust Estate (or in the Issuing REMIC, if any). On the Closing
Date, unless otherwise specified in the related Pooling and Servicing Agreement,
the aggregate Certificate Principal Balance of the Certificates will not be less
than the aggregate Unpaid Principal Balance of the underlying Assets as of the
Cut-off Date, after application of principal payments due on or before such
date, whether or not received. The Certificates will be substantially in the
forms annexed to the Pooling and Servicing Agreement. Unless otherwise provided
in the Pooling and Servicing Agreement, the Certificates of each Class will be
issuable in registered form. Each Certificate will share ratably in all rights
of the related Class.
Upon original issue, the Certificates shall be executed and delivered by the
Trustee and the Trustee shall cause the Certificates to be authenticated by the
Certificate Registrar to or upon the order of the Company upon receipt by the
Trustee of the Servicer Custodial Certification required by Section 2.02 hereof.
The Certificates shall be executed and attested by manual or facsimile signature
on behalf of the Trustee by an authorized Officer under its seal imprinted
thereon. Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper Officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall
represent entitlement to any benefit under the Pooling and Servicing Agreement
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form provided in the Pooling
and Servicing Agreement (in the forms of Certificates attached thereto as
Exhibits) executed by the Certificate Registrar by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their execution, except
that those Certificates delivered on the Closing Date may be dated the Accrual
Date.
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Section 5.03. Book-Entry Certificates.
(a) The Book-Entry Certificates will be represented initially by one or more
certificates registered in the name of CEDE & Co., as nominee of the Clearing
Agency. The Company, the Servicer and the Trustee may for all intents and
purposes (including the making of payments on the Book-Entry Certificates) deal
with the Clearing Agency as the authorized representative of the Beneficial
Owners of the Book-Entry Certificates for as long as those Certificates are
registered in the name of the Clearing Agency. The rights of Beneficial Owners
of the Book-Entry Certificates shall be limited to those established by law and
agreements between such Beneficial Owners and the Clearing Agency and Clearing
Agency Participants. The Beneficial Owners of the Book-Entry Certificates shall
not be entitled to certificates for the Book-Entry Certificates as to which they
are the Beneficial Owners, except as provided in subsection (c) below. Requests
and directions from, and votes of, the Clearing Agency, as Holder, shall not be
deemed to be inconsistent if they are made with respect to different Beneficial
Owners. Without the consent of the Company, the Servicer and the Trustee, a
Book-Entry Certificate may not be transferred by the Clearing Agency except to
another Clearing Agency that agrees to hold the Book-Entry Certificate for the
account of the respective Clearing Agency Participants and Beneficial Owners.
(b) Neither the Company, the Servicer nor the Trustee will have any
liability for any aspect of the records relating to or payment made on account
of Beneficial Owners of the Book-Entry Certificates held by the Clearing Agency,
for monitoring or restricting any transfer of beneficial ownership in a
Book-Entry Certificate or for maintaining, supervising or reviewing any records
relating to such Beneficial Owners.
(c) The Book-Entry Certificates will be issued in fully-registered,
certificated form to Beneficial Owners of Book-Entry Certificates or their
nominees, rather than to the Clearing Agency or its nominee, only if (1) the
Company advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities as depository with
respect to the Book-Entry Certificates and the Company is unable to locate a
qualified successor within 30 days or (2) the Company, at its option, elects to
terminate the book-entry system operating through the Clearing Agency. Upon the
occurrence of either such event, the Trustee shall notify the Clearing Agency,
which in turn will notify all Beneficial Owners of Book-Entry Certificates
through Clearing Agency Participants, of the availability of certificated
Certificates. Upon surrender by the Clearing Agency of the certificates
representing the Book-Entry Certificates and receipt of instructions for
re-registration, the Trustee will reissue the Book-Entry Certificates as
certificated Certificates to the Beneficial Owners identified in writing by the
Clearing Agency. Such certificated Certificates shall not constitute Book-Entry
Certificates. All reasonable costs associated with the preparation and delivery
of certificated Certificates shall be borne by the Company.
Section 5.04. Registration of Transfer and Exchange of Certificates.
The Trustee shall cause to be kept at its Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee will
initially serve as Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
If a Person other than the Trustee is appointed by the Trustee as
Certificate Registrar, such Person will give the Trustee prompt written notice
of the location, and any change in the location, of the Certificate Register,
and the Trustee shall have the right to inspect the Certificate Register at all
reasonable times and to obtain copies thereof, and the Trustee shall have the
right to rely upon a
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certificate executed on behalf of the Certificate Registrar by an Officer
thereof as to the names and addresses of the Holders of the Certificates and the
principal amounts and numbers of such Certificates.
Subject to Section 5.05 below, upon surrender for registration of transfer
of any Certificate at the Corporate Trust Office of the Trustee or at any other
office or agency of the Trustee maintained for such purpose, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
At the option of the Certificateholders, each Certificate may be exchanged
for other Certificates of the same Class with the same and authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and
cause the Certificate Registrar to authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be destroyed by
the Certificate Registrar.
The Trustee will (or will cause the Certificate Registrar to) provide notice
to the Trustee of each transfer of a Certificate, and will provide the Trustee
and Servicer with an updated copy of the Certificate Register on January 1 and
July 1 of each year (or at such other time as the Servicer may request).
Section 5.05. Restrictions on Transfer.
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(a) Securities Law Compliance. No transfer of any Private Certificate shall
be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. Any Holder of a Private
Certificate shall, and, by acceptance of such Certificate, does agree to,
indemnify the Company, the Trustee and the Servicer against any liability that
may result if any transfer of such Certificates by such Holder is not exempt
from registration under the Securities Act and all applicable state securities
laws or is not made in accordance with such federal and state laws. Neither the
Company, the Trustee nor the Servicer is obligated to register or qualify any
Private Certificate under the Securities Act or any other securities law or to
take any action not otherwise required under these Standard Terms or the related
Pooling and Servicing Agreement to permit the transfer of such Certificates
without such registration or qualification. The Trustee shall not register any
transfer of a Private Certificate (other than a Residual Certificate) unless and
until the prospective transferee provides the Trustee with a Transferee
Agreement or, if the Certificate to be transferred is a Rule 144A Certificate, a
Rule 144A Agreement certifying to facts which, if true, would mean that the
proposed transferee is a Qualified Institutional Buyer, and unless and until the
transfer otherwise complies with the provisions of this Section 5.05. If a
proposed transfer does not involve a Rule 144A Certificate or the transferee's
Rule 144A Agreement does not certify to facts which, if true, would mean that
the transferee is a Qualified Institutional Buyer, (i) the Servicer and the
Trustee shall require that the transferor and transferee certify as to the
factual basis for the registration exemption(s) relied upon and (ii) if such
transfer is made within three years after the acquisition thereof by a
non-Affiliate of the Company from the Company or an Affiliate of the Company,
the Servicer or the Trustee may also may require an Opinion of Counsel that such
transfer may be made without registration or qualification under the Securities
Act and applicable state securities laws, which Opinion of Counsel shall not be
obtained at the expense of the Company, the Trustee or the Servicer.
Notwithstanding the foregoing, no Rule 144A Agreement, Transferee Agreement or
Opinion of Counsel shall be required in connection with the initial transfer of
the Private Certificates and no Opinion of Counsel shall be required in
connection with the transfer of the Private Certificates by a broker or dealer,
if such broker or dealer was the initial transferee.
The Company shall provide to any transferee Holder of a Rule 144A
Certificate and any prospective transferee designated by such Holder information
regarding the related Certificates and the related Assets and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A, upon the request for such information by such
Holder.
(b) ERISA Compliance.
(1) Book-Entry Certificates. No transfer of all or any portion
of any Class of Book-Entry Certificates that are ERISA Restricted
Certificates shall be made to a transferee that is a Plan Investor, and
each Beneficial Owner of such a Certificate shall be deemed to have
represented, by virtue of its acquisition of such a Certificate, that
it is not a Plan Investor.
(2) Certificated Certificates. No transfer of all or any
portion of any Class of Certificates that (A) are not Book-Entry
Certificates and (B) are ERISA Restricted Certificates shall be made
unless and until the prospective transferee provides the Trustee and
the Servicer with a properly completed and executed Benefit Plan
Affidavit, together with a Benefit Plan Opinion if required in order to
comply with such Affidavit. Notwithstanding anything else to the
contrary herein, any purported transfer of such a Certificate to or on
behalf of a Plan Investor without delivery of
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a Benefit Plan Opinion shall be null and void.
(c) Residual Certificates. The Trustee shall not register any transfer of a
Residual Certificate (including any beneficial interest therein) unless it shall
have received the written consent of the Servicer. No Residual Certificate may
be transferred to a Disqualified Organization. The Servicer will not consent to
any proposed transfer or sale of a Residual Certificate (1) to any investor that
it knows is a Disqualified Organization or (2) if the transfer involves less
than an entire interest in a Residual Certificate, unless (A) the interest
transferred is an undivided interest or (B) the transferor or the transferee
provides the Servicer with an Opinion of Counsel obtained at its own expense to
the effect that the transfer will not jeopardize the REMIC status of any REMIC
consisting of assets of the Trust. The Servicer's consent to any transfer is
further conditioned upon the Servicer's receipt from the proposed transferee of
(x) a Residual Transferee Agreement, (y) a Benefit Plan Affidavit, and (z)
either (A) if the transferee is a Non-U.S. Person, an affidavit of the proposed
transferee in substantially the form attached as Exhibit 8-A to Exhibit 8 hereto
and a certificate of the transferor stating whether the Residual Certificate has
"tax avoidance potential" as defined in Treasury Regulations Section
1.860G-3(a)(2), or (B) if the transferee is a U.S. Person, an affidavit in
substantially the form attached as Exhibit 8-B to Exhibit 8 hereto. In addition,
if a proposed transfer involves a Private Certificate, the transfer shall be
subject to the additional restrictions set forth in Section 5.05(a) above.
Notwithstanding the foregoing, no Opinion of Counsel shall be required in
connection with the initial transfer of the Residual Certificates or their
transfer by a broker or dealer, if such broker or dealer was the initial
transferee. Notwithstanding the fulfillment of the prerequisites described
above, the Servicer may withhold its consent to, or the Trustee may refuse to
recognize, a transfer of a Residual Certificate, but only to the extent
necessary to avoid a risk of disqualification as a REMIC of a REMIC consisting
of Trust assets or the imposition of a tax upon a REMIC. Any attempted transfer
in violation of the foregoing restrictions shall be null and void and shall not
be recognized by the Trustee.
If a tax or a reporting cost is borne by a REMIC consisting of Trust assets
as a result of the transfer of a Residual Certificate or any beneficial interest
therein in violation of the restrictions set forth in this Section, the
transferor shall pay such tax or cost and, if such tax or cost is not so paid,
the Trustee, upon notification from the Servicer, shall pay such tax or cost or
may pay such tax or reporting cost with amounts that otherwise would have been
paid to the transferee of the Residual Certificate (or beneficial interest
therein). In that event, neither the transferee nor the transferor shall have
any right to seek repayment of such amounts from the Company, the Trustee, the
REMIC, the Servicer, or the other Holders of any of the Certificates, and none
of such parties shall have any liability for payment of any such tax or
reporting cost. In the event that a Residual Certificate is transferred to a
Disqualified Organization, the Servicer shall make, or cause to be made,
available the information necessary for the computation of the excise tax
imposed under section 860E(e) of the Code.
Section 5.06. Accrual of Interest on the Certificates.
Certificates entitled to receive interest in accordance with the related
Pooling and Servicing Agreement shall accrue interest at the applicable
Pass-Through Rates on the basis of a 360-day year consisting of twelve 30-day
months and on the assumption that each Interest Accrual Period consists of 30
days.
Section 5.07. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the
Trustee or the Certificate Registrar, or the Trustee and the
Certificate Registrar receive evidence to their satisfaction
of the destruction, loss or theft of any Certificate, and
(b) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by
them to save each of them harmless (the unsecured agreement
of an
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Institutional Holder being sufficient for such purpose), then, in the absence of
notice to the Trustee or the Certificate Registrar that such Certificate has
been acquired by a bona fide purchaser, the Trustee shall execute and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class, tenor and denomination or
Percentage Interest. Upon the issuance of any new Certificate under this
Section, the Trustee may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the Trustee and
the Certificate Registrar) connected therewith. Every new Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued on the Closing Date, regardless
of whether any destroyed, lost or stolen Certificate in lieu of which such new
Certificate was issued shall be found at any time.
Section 5.08. Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Certificate,
the Servicer, the Trustee and any agent of the Servicer or of the Trustee may
treat the Person in whose name any Certificate is registered on the Certificate
Register as the owner of such Certificate for the purpose of receiving
distributions on such Certificate and for all other purposes whatsoever (whether
or not such Certificate is overdue), and neither the Servicer, the Trustee nor
any agent of the Servicer or the Trustee shall be affected by notice to the
contrary.
Section 5.09. Appointment of Paying Agent.
The Trustee, at its own expense, may appoint a Paying Agent approved by the
Company for the purpose of making distributions to Certificateholders. The
Trustee shall cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in an Eligible Account in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee.
ARTICLE VI
THE COMPANY AND THE SERVICER
Section 6.01. Liability of the Company and the Servicer.
The Company and the Servicer each shall be liable in accordance with the
terms of the Pooling and Servicing Agreement only to the extent of the
obligations specifically imposed by the Pooling and Servicing Agreement and
undertaken hereunder by the Company or the Servicer, respectively.
Section 6.02. The Company's Representations and Warranties.
The Company represents and warrants to the Trustee, as of the date of a
Pooling and Servicing Agreement and as of the related Closing Date, as follows:
(a) The Company has been duly organized and is validly existing as a limited
liability company under the laws of the State of North Carolina, with full power
and authority to own its
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properties and conduct its business as now conducted by it and to enter into and
perform its obligations under the Pooling and Servicing Agreement, and has duly
qualified to do business under the laws of each jurisdiction wherein it conducts
any material business or in which the performance of its duties under the
Pooling and Servicing Agreement would require such qualification.
(b) The Company has all requisite power and authority to own its properties
and to conduct any and all business required or contemplated by the Pooling and
Servicing Agreement to be conducted by the Company and to perform the covenants
and obligations to be performed by it hereunder; the execution and delivery by
the Company of the Pooling and Servicing Agreement are within the power of the
Company and have been duly authorized by all necessary action on the part of the
Company; and neither the execution and delivery of the Pooling and Servicing
Agreement by the Company, nor the consummation by the Company of the
transactions herein contemplated, nor compliance with the provisions hereof by
the Company, will (1) conflict with or result in a breach of, or will constitute
a default under, any of the provisions of the articles of organization or
operating agreement of the Company or any law, governmental rule or regulation,
or any judgment, decree or order binding on the Company or its properties, or
any of the provisions of any indenture, mortgage, deed of trust, contract or
other instrument to which the Company is a party or by which it is bound or (2)
result in the creation or imposition of any lien, charge or encumbrance upon any
of its property pursuant to the terms of any such indenture, mortgage, deed of
trust, contract or other instrument.
(c) The Pooling and Servicing Agreement and all other documents and
instruments required or contemplated hereby to be executed or delivered by the
Company under the Pooling and Servicing Agreement have been duly authorized,
executed and delivered by the Company and, assuming due authorization, execution
and delivery thereof by all other parties thereto, constitute legal, valid and
binding agreements enforceable against the Company in accordance with their
terms, subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of equity.
(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any state, federal or other governmental
authority by the Company is required in connection with the authorization,
execution or delivery of the Pooling and Servicing Agreement or the performance
by the Company of the covenants and obligations to be performed by it hereunder.
(e) As of the Closing Date, no Proceedings are pending or, to the best of
the Company's knowledge, threatened against the Company that would prohibit its
entering into the Pooling and Servicing Agreement or performing its obligations
under the Pooling and Servicing Agreement, including assisting in the issuance
of the Certificates.
(f) The Company has obtained or made all necessary consents, approvals,
waivers and notifications of stockholders, creditors, lessors and other
nongovernmental persons, in each case, in connection with the execution and
delivery of the Pooling and Servicing Agreement, and the consummation of all the
transactions herein contemplated.
(g) The Company does not believe, nor does it have any reason or cause to
believe, that it cannot perform its obligations under the Pooling and Servicing
Agreement.
Upon discovery by any of the Company, the Servicer or the Trustee of a
breach of any of the foregoing representations, warranties and covenants that
materially and adversely affects the interest of the Certificateholders in any
underlying Asset, the party discovering such breach shall give prompt written
notice thereof (but in no event later than two Business Days following such
discovery) to the other parties hereto.
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Section 6.03. Representations, Warranties and Covenants of the Servicer.
The Servicer hereby represents, warrants and covenants to the Trustee, as of
the date hereof and as of the Closing Date, as follows:
(a) The Servicer has been duly incorporated and is validly existing as a
corporation under the laws of the State of North Carolina (or the state of its
incorporation, if the Servicer is not OAC) and is in good standing under such
laws, with full power and authority to own its properties and conduct its
business as now conducted by it and to enter into and perform its obligations
under the Pooling and Servicing Agreement, and has duly qualified to do business
as a foreign corporation and is in good standing under the laws of each
jurisdiction wherein it conducts any material business or in which the
performance of its duties under the Pooling and Servicing Agreement would
require such qualification, except where the failure so to qualify would not
have a material adverse effect on the performance of its obligations under the
Pooling and Servicing Agreement. The Servicer holds all material licenses,
certificates, franchises, and permits from all governmental authorities
necessary for the conduct of its business and will have received no notice of
proceedings relating to the revocation of any such license, certificate or
permit, that, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would affect materially and adversely the conduct
of the business, results of operations, net worth or condition (financial or
otherwise) of the Servicer.
(b) The Servicer has all requisite corporate power and authority to own its
properties and to conduct any and all business required or contemplated by the
Pooling and Servicing Agreement to be conducted by the Servicer and to perform
the covenants and obligations to be performed by it hereunder; the execution and
delivery by the Servicer of the Pooling and Servicing Agreement are within the
corporate power of the Servicer and have been duly authorized by all necessary
corporate action on the part of the Servicer; and neither the execution and
delivery of the Pooling and Servicing Agreement by the Servicer, nor the
consummation by the Servicer of the transactions herein contemplated, nor
compliance with the provisions hereof by the Servicer, will (1) conflict with or
result in a breach of, or will constitute a default under, any of the provisions
of the articles of incorporation or by-laws of the Servicer or any law,
governmental rule or regulation, or any judgment, decree or order binding on the
Servicer or its properties, or any of the provisions of any indenture, mortgage,
deed of trust, contract or other instrument to which the Servicer is a party or
by which it is bound or (2) result in the creation or imposition of any lien,
charge or encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, deed of trust, contract or other instrument.
(c) The Pooling and Servicing Agreement and all other documents and
instruments required or contemplated hereby to be executed or delivered by the
Servicer under the Pooling and Servicing Agreement have been duly authorized,
executed and delivered by the Servicer and, assuming due authorization,
execution and delivery thereof by all other parties thereto, constitute legal,
valid and binding agreements enforceable against the Servicer in accordance with
their terms, subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of equity.
(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any federal, state or other governmental
authority by the Servicer is required in connection with the authorization,
execution or delivery of the Pooling and Servicing Agreement or the performance
by the Servicer of the covenants and obligations to be performed by it
hereunder.
(e) No Proceedings are pending or, to the best of the Servicer's knowledge,
threatened against the Servicer that would prohibit its entering into the
Pooling and Servicing Agreement or
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performing its obligations under the Pooling and Servicing Agreement, including
assisting in the issuance of the Certificates.
(f) The Servicer maintains an errors and omissions policy and fidelity bond
that covers the Servicer's performance under the Pooling and Servicing Agreement
and such policy and bond are in full force and effect.
(g) The Servicer has obtained or made all necessary consents, approvals,
waivers and notifications of stockholders, creditors, lessors and other
nongovernmental persons, in each case, in connection with the execution and
delivery of the Pooling and Servicing Agreement, and the consummation of all the
transactions herein contemplated.
(h) The Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform its obligations under the Pooling and Servicing
Agreement.
Upon discovery by any of the Company, the Servicer or the Trustee of a
breach of any of the foregoing representations, warranties and covenants that
materially and adversely affects the interest of the Certificateholders in any
underlying Asset, the party discovering such breach shall give prompt written
notice thereof (but in no event later than two Business Days following such
discovery) to the other parties hereto.
Section 6.04. Corporate Existence.
Subject to the provisions of the following paragraph, the Company and the
Servicer each will keep in full effect its existence, rights and franchises
under the laws of the jurisdiction in which it is incorporated and will obtain
and preserve its qualification to do business as a foreign entity in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of the Pooling and Servicing Agreement, any
Certificates or any of the Assets included in the Trust Estate, and to perform
its duties under the Pooling and Servicing Agreement.
Any Person (a) into which the Company or the Servicer may be merged or
consolidated, (b) that may result from any merger, conversion or consolidation
to which the Company or the Servicer shall be a party, (c) that may succeed to
the business of the Company or the Servicer, or (d) to which the Company or the
Servicer may transfer all of its assets, shall be the successor to the Company
or the Servicer hereunder, respectively, without the execution or filing of any
document or any further act by any of the parties to the Pooling and Servicing
Agreement, anything herein to the contrary notwithstanding; PROVIDED, that any
such successor to the Servicer must agree in writing to be bound by each of the
Servicer's obligations hereunder and that each applicable Rating Agency must
deliver to the Trustee a letter to the effect that such successorship shall not
result in a downgrading of the rating initially assigned by the Rating Agency to
any Class of Certificates as to which the Company has requested a rating from
such Rating Agency.
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Section 6.05. Limitation on Liability of the Company, the Servicer and Others.
Neither the Company, the Servicer nor any of the directors, officers,
employees or agents of any of the Company or the Servicer shall be under any
liability to the Trust or the Certificateholders and all such Persons shall be
held harmless for any action taken or for refraining from the taking of any
action in good faith pursuant to the Pooling and Servicing Agreement, or for
errors in judgment; PROVIDED, HOWEVER, that this provision shall not protect any
such Person against any breach of warranties or representations made herein or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Company,
the Servicer and any of the directors, officers, employees or agents of either
the Company or the Servicer may rely in good faith on any document of any kind
which, PRIMA FACIE, is properly executed and submitted by any Person respecting
any matters arising hereunder. Neither the Company nor the Servicer shall be
under any obligation to appear in, prosecute or defend any legal action unless
such action is related to its respective duties under the Pooling and Servicing
Agreement and such action in its opinion does not involve it in any expense or
liability, except as provided in Section 10.01(b) hereof; PROVIDED, HOWEVER,
that the Company or the Servicer may each in its discretion undertake any such
action that it deems necessary or desirable with respect to the Pooling and
Servicing Agreement and the rights and duties of the parties thereto and the
interests of the Certificateholders thereunder if the Certificateholders offer
to the Company or the Servicer, as the case may be, reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby.
Section 6.06. Servicer Resignation.
The Servicer shall not resign from the obligations and duties imposed on it
under the Pooling and Servicing Agreement, except (a) upon appointment of a
successor servicer and receipt by the Trustee of a letter from each applicable
Rating Agency that such a resignation and appointment will not, in and of
itself, result in a downgrading of any rated Certificates or (b) upon
determination by its Board of Directors that the performance of its duties under
the Pooling and Servicing Agreement is no longer permissible under applicable
law. Any such determination permitting the resignation of the Servicer shall be
evidenced by a resolution of its Board of Directors and an Opinion of Counsel to
such effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 7.02
hereof.
Section 6.07. Assignment or Delegation of Duties by the Servicer and the
Company.
(a) The Servicer may at any time without notice or consent delegate certain
computational, data processing, collection and foreclosure duties hereunder to
any entity. No such delegation shall relieve the Servicer in any respect of its
responsibility with respect to such duties.
(b) Neither the Servicer nor the Company may assign the Pooling and
Servicing Agreement or any of its rights, power, duties or obligations hereunder
(except as provided in Section 6.07(a) above), provided that the Servicer and
the Company may assign the Pooling and Servicing Agreement in connection with a
consolidation, merger, conveyance, transfer or lease made in compliance with
Section 6.04 hereof.
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(c) Except as provided in Sections 6.04 and 6.06 hereof, the duties and
obligations of the Servicer and the Company under the Pooling and Servicing
Agreement shall continue until the Pooling and Servicing Agreement shall have
been terminated as provided in Section 9.01 hereof, and shall survive the
exercise by the Trustee of any right or remedy under the Pooling and Servicing
Agreement, or the enforcement by the Trustee of any provisions of the Pooling
and Servicing Agreement.
Section 6.08. The Company and Servicer May Own Certificates.
The Company, the Servicer and any Affiliate of the foregoing may in its
individual or any other capacity become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Company, the Servicer
or an Affiliate of the Company or the Servicer.
Section 6.09. Protection of Trust Estate.
Except as limited by Section 2.02(c)(2), Section 2.02(c)(3) or Section
2.03(a) above, the Company will execute and deliver from time to time all
amendments to the Pooling and Servicing Agreement and all financing statements,
continuation statements, instruments of further assurance and other instruments
necessary or advisable in order to, and will take such other action as the
Trustee deems necessary or advisable in order to:
(a) grant to the Trustee more effectively all or any portion of the Trust
Estate;
(b) preserve and defend the Trust's title to the Trust Estate and the rights
therein of the Trustee and the Holders of Certificates against the claims of all
persons and parties;
(c) maintain or preserve the lien (and the priority thereof) created by the
Pooling and Servicing Agreement or to carry out more effectively the purposes
hereof (including the filing of continuation statements under the UCC as
necessary);
(d) perfect, publish notice of, or protect the validity of any grant made or
to be made pursuant to the Pooling and Servicing Agreement; or
(e) enforce any of the related Asset Documents.
The Company and the Servicer each hereby designates the Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 6.09; PROVIDED, that the
Trustee shall have no duty to determine whether the filing of any financing
statement shall be necessary or to file such statements except upon written
request of the Company or the Servicer. After execution of any continuation
statement or other instrument pursuant to this Section, the Trustee shall
deliver such instrument to the Servicer for filing. Promptly after filing any
such instrument or causing any such instrument to be filed, the Servicer shall
deliver an Officer's Certificate, signed by an Officer of the Servicer, to the
Trustee stating that such continuation statement or other instrument has been
filed.
The Company shall pay or cause to be paid, on behalf of the Trust, any taxes
levied on the account of the ownership by the Trust of the related Assets.
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Section 6.10. Performance of Obligations.
The Servicer shall not take any action, and will use its best efforts not to
permit any action to be taken by others, that would release any Person from any
of such Person's covenants or obligations under any of the related Asset
Documents or under any instrument included in the Trust Estate, or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the related Asset
Documents or any such instrument, except as expressly provided in the Pooling
and Servicing Agreement or such Asset Documents or other instrument or unless
such action will not adversely affect the interests of the Holders of the
Certificates.
ARTICLE VII
EVENT OF DEFAULT; TERMINATION OF SERVICING ARRANGEMENTS
Section 7.01. Events of Default.
Any of the following acts or occurrences shall constitute an Event of
Default by the Servicer:
(a) any failure by the Servicer to remit funds in the Certificate Account to
the Distribution Account or to make a required P&I Advance that is not deemed by
the Servicer to be a Non-Recoverable Advance, in either case as required by
Section 3.07(b) hereof, and the continuance of such failure unremedied for a
period of five days after the date upon which such deposit, payment or
remittance was due;
(b) any failure on the part of the Servicer duly to observe or perform in
any material respect any of the covenants or agreements on the part of the
Servicer (other than covenants referred to in clause (a) above) contained in the
Certificates or in the Pooling and Servicing Agreement, which failure continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by the Holders of
Certificates of a Series entitled to at least 25% of the related Voting Rights;
(c) the issuance of a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law or
appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, against the
Servicer, and the remaining of such decree or order in force undischarged or
unstayed for a period of 60 consecutive days;
(d) the Servicer's consent to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings of, or relating to, the Servicer or of, or
relating to, all or substantially all of the property of the Servicer; or
(e) the Servicer's (1) admission in writing of its inability to pay its
debts generally as they become due, (2) filing of a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, (3) making of an assignment for the benefit of its
creditors, or (4) voluntarily suspending payment of its obligations.
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If an Event of Default concerning the Servicer shall occur hereunder, then,
and in each and every such case, so long as such Event of Default shall not have
been remedied or waived, the Trustee may, and at the direction of the Holders of
Certificates evidencing greater than 50% of the Voting Rights, shall, by notice
then given in writing to the Servicer, terminate all of the rights and
obligations of the Servicer as servicer. On and after the receipt by the
Servicer of any such written notice, all authority and power of the Servicer
hereunder, whether with respect to the Certificates (except its rights as a
Holder thereof) or the Contracts or otherwise, shall pass to and be vested in
the Trustee pursuant to and under this Section 7.01 (PROVIDED, HOWEVER, that the
Servicer shall continue to be entitled to receive all amounts accrued and owing
to it as Servicer under the Pooling and Servicing Agreement on or prior to the
occurrence of a Event of Default specified in Section 7.01(a) above or, in the
case of any other Event of Default, on or prior to the date of such
termination); and, without limitation, the Trustee hereby is authorized and
empowered on behalf of the Servicer, as attorney-in-fact or otherwise, to
execute and deliver any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Contracts and related documents or otherwise.
The Servicer shall cooperate with the Trustee in effecting the termination
of the responsibilities and rights of the Servicer hereunder, including, without
limitation, (1) transferring to the Trustee for administration by it of all cash
amounts that shall be held at the time by the Servicer for deposit, shall have
been deposited by the Servicer into the Servicing Account, the Certificate
Account or the Distribution Account, or shall be received thereafter with
respect to a Contract, and (2) the prompt provision to the Trustee (in no event
later than ten Business Days subsequent to its receipt of such notice of
termination) of all documents and records, electronic and otherwise, reasonably
requested by the Trustee or its designee in order for the Trustee or its
designee to assume and carry out the duties and obligations that otherwise were
to have been performed and carried out by the Servicer under the Pooling and
Servicing Agreement but for the termination of the Servicer.
Upon any termination of the Servicer pursuant to this Section, the Trustee
or its designee shall pay over to the Servicer that portion of any future
proceeds of the related Assets that, if it were acting hereunder at such future
time, it would be permitted to retain or withdraw from the Certificate Account
or Distribution Account in consideration of, or in reimbursement for, previous
services performed, or advances made, by it or for other matters for which it is
entitled to reimbursement pursuant hereto or to the terms of the Pooling and
Servicing Agreement. Prior to appointment of any successor Servicer, the Trustee
must notify the Rating Agency in writing of the identity of such prospective
successor.
Section 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination pursuant
to Section 7.01 hereof or resigns pursuant to Section 6.06 hereof, the Trustee
shall be the successor in all respects to the Servicer in its capacity as
servicer under the Pooling and Servicing Agreement and in connection with the
transactions provided for herein and shall be subject to all the
responsibilities, duties and liabilities placed on the Servicer by the terms and
provisions hereof. As compensation therefor, the Trustee, except as provided in
Section 7.01 hereof, shall be entitled to such compensation (whether payable out
of the Distribution Account or otherwise) as the Servicer would have been
entitled to receive hereunder if no such notice of termination had been given,
as well as all protections and indemnification afforded the Servicer pursuant to
Section 6.05 above. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, any established housing
finance institution having a net worth of not less than $40,000,000 and the
regular business of which shall have included, for at least one year prior to
such
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appointment, the servicing of a portfolio of manufactured housing receivables of
not less than $100,000,000, as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder. No appointment of a successor to the Servicer shall be
effective until the assumption by the successor of all future responsibilities,
duties and liabilities of the Servicer under the Pooling and Servicing
Agreement. Pending appointment of a successor to the Servicer hereunder, unless
the Trustee is prohibited by law from so acting, the Trustee or an Affiliate of
the Trustee shall act as Servicer hereunder as provided above. Notwithstanding
any of the foregoing, the successor Servicer shall not be required to purchase
any Assets from the Trust pursuant to these Standard Terms except (i) under
Section 2.06(a)(2) hereof to the extent the obligation to repurchase arose out
of a breach of a representation, warranty or covenant by the successor Servicer
and (ii) under Section 2.06(b) hereof to the extent the Servicer's obligation to
effect remedial action as described in such Section arose after the successor
Servicer began serving as Servicer. It is understood that any predecessor
Servicer shall remain liable for any breaches of representations, warranties and
covenants that it committed while it was the Servicer, and shall remain
responsible for effecting remedial actions described in Section 2.06(b) hereof
(and for repurchasing Assets pursuant to such Section 2.06(b)) to the extent the
obligation to undertake such remedial action arose while such predecessor
Servicer was the Servicer hereunder.
In connection with the appointment of a successor Servicer, the Trustee may
make such arrangements for the compensation of such successor servicer out of
payments on the related Assets as it and such successor shall agree; PROVIDED,
HOWEVER, that no such compensation shall be in excess of that permitted the
Servicer under the terms of the Pooling and Servicing Agreement. The Trustee and
such successor servicer shall take such action, consistent with the Pooling and
Servicing Agreement, as shall be necessary to effectuate any such succession.
Any successor to the Servicer shall maintain in force during the term of its
service as Servicer the policy or policies that the Servicer is required to
maintain pursuant to Section 3.16(c) hereof.
Upon any Event of Default described hereunder, the Trustee, in addition to
the rights specified in this Section, shall have the right, in its own name and
as "Trustee," to take all actions now or hereafter existing at law, in equity or
by statute to enforce its rights and remedies and to protect the interests of
the Certificateholders, and enforce the rights and remedies of the
Certificateholders (including the institution and prosecution of all judicial,
administrative and other proceedings and the filings of proofs of claim and debt
in connection therewith). No remedy provided for by the Pooling and Servicing
Agreement shall be exclusive of any other remedy, and each and every remedy
shall be cumulative and in addition to any other remedy and no delay or omission
to exercise any right or remedy shall impair any such right or remedy or shall
be deemed to be a waiver of any Event of Default. Amounts payable to the Trustee
to reimburse it for any expenses it incurs in connection with any actions taken
by it pursuant to this paragraph are intended to constitute administrative
expenses. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Certificateholder any plan of reorganization, arrangement, adjustment or
composition affecting the Certificates or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any
Certificateholder in any such Proceeding.
For the purposes of this Section 7.02 and Section 7.03 hereof, the Trustee
shall not be deemed to have knowledge of a Default or an Event of Default
hereunder unless an Officer of the Trustee having direct responsibility for the
administration of the Pooling and Servicing Agreement has actual knowledge
thereof or unless written notice of any Event of Default is received by the
Trustee and such notice references the Certificates or the Trust.
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Section 7.03. Notifications to Servicer and to Certificateholders.
(a) Upon obtaining actual knowledge of any Default, the Trustee shall
promptly notify the Servicer and each Certificateholder (at their respective
addresses appearing in the Certificate Register) thereof.
(b) Upon any termination of, or appointment of a successor to, the Servicer
pursuant to Section 7.02 hereof, the Trustee shall give prompt written notice
thereof to the Certificateholders at their respective addresses appearing in the
Certificate Register.
(c) As soon as practicable after the Trustee's obtaining knowledge of the
occurrence of an Event of Default, the Trustee shall transmit by certified mail
to all Holders of the Certificates (at their respective addresses appearing in
the Certificate Register) notice of such Event of Default or occurrence known to
the Trustee, unless such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by the Pooling and Servicing
Agreement, and shall use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs. Prior to the occurrence of an Event of Default or after all
Events of Default which may have occurred have been cured or waived, the Trustee
shall exercise such of the rights and powers vested in it by the Pooling and
Servicing Agreement, and shall use the same degree of care and skill in their
exercise, as a corporate trustee would exercise or use under the circumstances
in the administration of a corporate trust agreement.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of the Pooling and Servicing Agreement, shall examine them to determine whether
they conform to the requirements of the Pooling and Servicing Agreement;
PROVIDED, HOWEVER, that the Trustee shall be under no duty to recalculate,
verify or recompute the information provided to it hereunder by the Company or
the Servicer. If any such instrument is found not to conform to the requirements
of the Pooling and Servicing Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trustee's satisfaction, the Trustee will
provide notice thereof to the related Certificateholders.
No provision of the Pooling and Servicing Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(a) prior to the occurrence of an Event of Default with
respect to the Servicer of which the Trustee has notice or knowledge,
and after the curing or waiver of any such Event of Default, the duties
and obligations of the Trustee shall be determined solely by the
express provisions of the Pooling and Servicing Agreement, the Trustee
shall not be liable except for the
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performance of such duties and obligations as are specifically set
forth in the Pooling and Servicing Agreement, no implied covenants or
obligations shall be read into the Pooling and Servicing Agreement
against the Trustee and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee that conform to
the requirements of the Pooling and Servicing Agreement;
(b) the Trustee shall not be liable in its individual capacity
for any error of judgment made in good faith by an Officer of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(c) the Trustee shall not be liable in its individual capacity
with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the Holders of
Certificates of a Series entitled to at least 25% of the related Voting
Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under the Pooling and
Servicing Agreement;
(d) Any determination of negligence or bad faith of the
Trustee shall be made only upon a finding that there is clear and
convincing evidence (and not upon the mere preponderance of evidence)
thereof in a proceeding before a court of competent jurisdiction in
which the Trustee has had an opportunity to defend; and
(e) in no event shall the Trustee be held liable for the
actions or omissions of the Servicer or the Company (excepting the
Trustee's own actions as Servicer), and in connection with any action
or claim or recovery sought against the Trustee based upon facts
involving the acts or omissions of the Servicer or the Company, or
involving any allegation or claim of liability or recovery against the
Trustee by the Servicer or by the Company, the Trustee shall not be
held to a greater standard of care than the Servicer or the Company
would be held in such situation.
Except as specifically required herein, the Trustee shall not be required to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, unless such risk or liability relates to its
ordinary services hereunder.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01 hereof:
(1) In the absence of bad faith, the Trustee may rely, and
shall be protected in acting or refraining from acting in reliance
upon, any resolution, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties. Further, the Trustee may accept a copy of the vote of the
Board of Directors of any party certified by its clerk or assistant
clerk or secretary or assistant secretary as conclusive evidence of the
authority of any person to act in accordance with such vote, and such
vote may be considered as in full force and effect until receipt by the
Trustee of written notice to the contrary.
(2) The Trustee may rely, in the absence of bad faith on its
part, upon a certificate of
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an Officer of the appropriate Person whenever in the administration of
the Pooling and Servicing Agreement the Trustee shall deem it desirable
that a matter be proved or established (unless other evidence be
prescribed herein specifically) prior to taking, suffering or omitting
any action hereunder.
(3) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such written advice or Opinion of Counsel.
(4) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by the Pooling and Servicing
Agreement or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of the Pooling and
Servicing Agreement, unless such Certificateholders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby.
(5) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing to do so by the Holders of Certificates of a Series entitled to
at least 25% of the related Voting Rights; PROVIDED, HOWEVER, that if
the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation, in the opinion of the Trustee, is not assured to
the Trustee by the security afforded to it by the terms of the Pooling
and Servicing Agreement, the Trustee may require indemnity against such
expense or liability as a condition to taking any such action. The
expense of every such examination shall be paid by the Servicer or, if
paid by the Trustee, shall be repaid by the Servicer upon demand.
(6) The Trustee may execute any of the trusts or powers under
the Pooling and Servicing Agreement or perform any duties hereunder
either directly or by or through agents, attorneys or co-trustees and
the Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
under the Pooling and Servicing Agreement.
(7) Whenever the Trustee is authorized herein to require acts
or documents in addition to those required to be provided it in respect
of any matter, it shall be under no obligation to make any
determination as to whether such additional acts or documents should be
required unless obligated to do so under Section 8.01 hereof.
(8) The Trustee shall not be deemed to have notice or
knowledge of any matter, including, without limitation, any Event of
Default, unless one of its Officers having direct responsibility for
the administration of the Pooling and Servicing Agreement has actual
knowledge or record thereof or unless written notice thereof is
received by the Trustee at the Corporate Trust Office and such notice
references the Certificates generally, the Company, the Trust or the
Pooling and Servicing Agreement.
(9) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by the Pooling and Servicing Agreement.
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(10) The permissive right or authority of the Trustee to take
any action enumerated in the Pooling and Servicing Agreement shall not
be construed as a duty or obligation.
Certificateholders shall have rights to institute suits, actions or
proceedings in equity or at law upon or under or with respect to the Pooling and
Servicing Agreement only under the circumstances described in the third
paragraph of Section 11.03 hereof.
(b) All rights of action under the Pooling and Servicing Agreement or under
any of the Certificates enforceable by the Trustee may be enforced by it without
the possession of any of the Certificates, or the production thereof at the
trial or other Proceeding relating thereto, and any such suit, action or
Proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of the
Pooling and Servicing Agreement.
Section 8.03. Trustee Not Liable for Certificates or Assets.
The recitals contained in the Pooling and Servicing Agreement and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Company or the
Servicer and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations or warranties as to the validity or sufficiency
of the Pooling and Servicing Agreement or of the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) or of any
underlying Asset or related document. The Trustee shall not be accountable for
the use or application by the Company of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Servicer in respect of the underlying Assets or deposited in or withdrawn
from the Servicing Account, the Certificate Account or the Distribution Account
other than any funds held by or on behalf of the Trustee in accordance with the
Pooling and Servicing Agreement.
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Section 8.04. Trustee May Own Certificates.
The Trustee, in its individual capacity or any other capacity, may become
the owner or pledgee of Certificates with the same rights it would have if it
were not Trustee.
Section 8.05. Trustee's Fees and Expenses.
The Servicer shall pay to the Trustee from time to time, pursuant to the
Pooling and Servicing Agreement or a separate fee agreement, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts created under the Pooling and Servicing
Agreement and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and shall reimburse the Trustee for all reasonable
expenses, disbursements and advances (other than any expenses incurred by the
Trustee in connection with its assumption of the obligations of the Servicer
pursuant to Section 7.02 hereof) incurred or made by the Trustee in accordance
with any of the provisions of the Pooling and Servicing Agreement (including but
not limited to the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Servicer and held harmless against any loss, liability or
expense, including reasonable attorney's fees, incurred as a result of or in
connection with the Pooling and Servicing Agreement or the Certificates,
including, but not limited to, any such loss, liability, or expense incurred in
connection with any legal action against the Trust or the Trustee or any
director, officer, employee or agent thereof, or the performance of any of the
Trustee's duties under the Pooling and Servicing Agreement other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties under the Pooling and Servicing
Agreement or by reason of reckless disregard of obligations and duties under the
Pooling and Servicing Agreement. Any payment hereunder made by the Servicer to
the Trustee shall be from the Servicer's own funds without any right to
reimbursement therefor. The obligations of the Servicer under this Section 8.05
shall survive the termination of the Trust and the resignation or removal of the
Trustee.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee shall at all times be a corporation or national banking
association that is not an Affiliate of the Company or the Servicer, organized
and doing business under the laws of any state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 (or qualifying as a Qualified Bank)
and subject to supervision or examination by federal or state regulatory
authorities. If such corporation or association publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07
hereof.
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Section 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts created
pursuant to the Pooling and Servicing Agreement by giving written notice of such
resignation to the Company, the Servicer and to all related Certificateholders.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor Trustee by written instrument, in duplicate, which instrument shall be
delivered to the resigning Trustee and to the successor Trustee. A copy of such
instrument shall be delivered to the Certificateholders and to the Servicer by
the Company. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the resigning Trustee's giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.06 hereof and shall fail to resign after written request
therefor by the Company, or if at any time the Trustee shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation thereof, then the Company may remove
the Trustee and appoint a successor Trustee by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor Trustee. A copy of such instrument shall be delivered to the
Certificateholders and to the Servicer by the Company.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may remove the Trustee at any time and appoint a successor Trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Company, one complete set to the Trustee so removed and one
complete set to the successor so appointed. A copy of such instrument shall be
delivered to the Certificateholders and to the Servicer by the Company. If the
Holders remove the Trustee otherwise than for reasonable cause based upon the
Trustee's failure to continue to meet the eligibility requirements set forth in
Section 8.06 above or the Trustee's failure to perform its duties as described
herein, then the Holders so removing the Trustee shall bear any and all costs
and expenses arising from such removal and substitution.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 8.08 hereof.
Section 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07 hereof shall
execute, acknowledge and deliver to the Company, the Servicer and to its
predecessor Trustee an instrument accepting such appointment under the Pooling
and Servicing Agreement and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor Trustee all related Asset Documents and related
documents and statements held by it under the Pooling and Servicing Agreement
and the Company, the Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as reasonably may be required
for more fully and certainly vesting and confirming in the successor Trustee all
such rights, powers, duties and obligations.
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No successor Trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor Trustee shall be eligible
under the provisions of Section 8.06 hereof.
Upon acceptance of appointment by a successor Trustee as provided in this
Section, the Company shall mail notice of the succession of such Trustee under
the Pooling and Servicing Agreement to all Holders of the Certificates at their
addresses as shown in the Certificate Register. If the Company fails to mail
such notice within ten days after acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of the Company.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or association succeeding to the business
of the Trustee, shall be the successor of the Trustee under the Pooling and
Servicing Agreement provided such corporation or association shall be eligible
under the provisions of Section 8.06 hereof, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. Prior to any such merger, conversion or
consolidation, the Trustee shall notify each applicable Rating Agency in writing
of the pendency of such merger, conversion or consolidation.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
For the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Estate or property securing the same may be located
at any time, the Company, the Servicer and the Trustee, acting jointly, shall
have the power and shall execute and deliver all instruments necessary to
appoint one or more Persons approved by the Trustee to act as co-Trustee or
co-Trustees, jointly with the Trustee, or separate Trustee or Trustees, of all
or any part of the Trust Estate, and to vest in such Person or Persons, in such
capacity, such title to the Trust Estate or any part thereof, and, subject to
the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Company, the Servicer and the Trustee may consider
necessary or desirable. If the Company or the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
the Trustee alone shall have the power to make such appointment. No co-Trustee
or separate Trustee(s) hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 8.06 hereof and no notice to
Holders of Certificates of the appointment of co-Trustee(s) or separate
Trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-Trustee or separate Trustee pursuant
to this Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate Trustee or co-Trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee under the Pooling and Servicing
Agreement or as successor to the Servicer pursuant to Section 7.02 hereof), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Estate or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate Trustee or co-Trustee at the
direction of the Trustee.
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Any notice, request or other writing given to the Trustee shall be deemed to
have been given to each of the then separate Trustees and co-Trustees, as
effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to the Pooling and Servicing
Agreement and the conditions of this Article VIII. Each separate Trustee and
co-Trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of the Pooling and Servicing Agreement, specifically
including every provision of the Pooling and Servicing Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the Trustee.
Every such instrument shall be filed with the Trustee.
Any separate Trustee or co-Trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of the Pooling and
Servicing Agreement on its behalf and in its name. If any separate Trustee or
co-Trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11. Appointment of Custodians. The Trustee may, with the consent
of the Servicer, appoint one or more Custodians to hold all or a portion of the
Trustee Mortgage Loan Files as agent for the Trustee, by entering into a
custodial agreement. The appointment of any Custodian may at any time be
terminated and a substitute Custodian appointed therefor by the Trustee. The
Trustee shall terminate the appointment of any Custodian and appoint a
substitute custodian upon the request of the Servicer to the Trustee. Subject to
this Article VIII, the Trustee agrees to comply with the terms of each custodial
agreement and to enforce the terms and provisions thereof against the Custodian
for the benefit of the Certificateholders. Each Custodian shall be a depository
institution or trust company subject to supervision by federal or state
authority, shall have combined capital and surplus of at least $10,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Trustee Mortgage Loan File. Any such Custodian may not be an affiliate of the
Company or any Seller with respect to the applicable Trust.
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates.
All rights of action and claims under the Pooling and Servicing Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
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ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Repurchase or Liquidation of All Contracts.
(a) The respective obligations and responsibilities of the Company, the
Servicer and the Trustee under the Pooling and Servicing Agreement (other than
the obligations of the Trustee to make distributions to Certificateholders, to
reimburse the Servicer for outstanding Advances, to pay the Servicer accrued and
previously unpaid Servicing Fees or to provide tax information as provided in
Section 4.01(a) hereof and other than the obligations of the Servicer under
Article X hereof) shall terminate upon distribution to the Certificateholders of
all amounts held by or on behalf of the Trustee and required hereunder to be so
distributed on the Distribution Date coinciding with or following the earlier to
occur of (1) a Terminating Purchase for an amount equal to the Termination Price
and (2) the final payment or other liquidation (or any advance with respect
thereto) of the last Asset remaining in the Trust or the disposition of the last
Repo Property or REO Property remaining in the Trust; PROVIDED, HOWEVER, that in
no event shall the Trust created hereby continue beyond the expiration of 21
years after the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof.
(b) Unless otherwise provided in the Pooling and Servicing Agreement, the
Servicer or the Holders of the majority of the Percentage Interest in the
Residual Certificates of a REMIC (or, in the case of a double REMIC Series, the
Pooling REMIC) (the "Residual Majority") may, at their respective options, make,
or cause a Person to make, a Terminating Purchase on any Distribution Date on or
after the earlier to occur of (1) the Servicer's determination, based upon an
Opinion of Counsel, that the REMIC status of any REMIC related to the Trust has
been lost or that a substantial risk exists that such REMIC status will be lost
for the then-current taxable year, or (2) the Distribution Date on which, after
taking into account distributions of principal to be made on such Distribution
Date, the sum of the Certificate Principal Balances of the Certificates is less
than 10% of the sum of the original Certificate Principal Balances of the
Certificates.
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(c) The Servicer or the Residual Majority shall notify the Trustee and the
Certificate Registrar in writing of its election to make or to cause a
Terminating Purchase no later than the Distribution Date preceding the
Distribution Date on which the Certificates will be retired as a result of such
Terminating Purchase. The Servicer shall advise the Trustee and the Certificate
Registrar of the final payment or other liquidation of the last Asset remaining
in the Trust or the disposition of the last Repo Property or REO Property
remaining in the Trust at least two Business Days prior to the Remittance Date
in the month in which the Trust will terminate as a result thereof.
Notice of any termination of the Trust shall be given promptly by the
Trustee by letter sent to the Certificateholders by certified mail (1) in the
event such notice is given in connection with a Terminating Purchase, not
earlier than the fifth day of the month preceding the month of such termination
and not later than the first day of the month of such termination or (2)
otherwise not later than the Remittance Date preceding the final Distribution
Date, in each case specifying (A) the Distribution Date upon which the Trust
will terminate and that final payment of the Certificates will be made on such
Distribution Date and (B) the amount of any such final distribution. The Trustee
shall give such notice to the Certificate Registrar at the time such notice is
given to Certificateholders. In the event such notice is given in connection
with a Terminating Purchase, the Terminator shall deliver to the Trustee for
deposit into the Distribution Account on the Business Day immediately preceding
the Distribution Date on which the Terminating Purchase is to take place an
amount in next day funds equal to the Termination Price. Notwithstanding the
foregoing, if the Terminator is the Servicer, the Terminator, upon notice to the
Trustee, shall be entitled to remit the Termination Price net of amounts owed to
the Terminator in respect of unreimbursed outstanding Advances made by such
Terminator or amounts required to be reimbursed or paid to such Terminator
hereunder.
(d) On the final Distribution Date, the Trustee shall distribute to the
Certificateholders as of the related Record Date the amount otherwise
distributable on the Certificates on such Distribution Date (if such final
Distribution Date is not the result of a Terminating Purchase).
Upon any termination of the Trust as the result of a Terminating Purchase,
the Trustee shall distribute the Termination Price as though it were the amount
on deposit in the Distribution Account in accordance with Section 4.03(a) hereof
and in accordance with the related Pooling and Servicing Agreement.
Following such final distribution, the Servicer and the Trustee shall
promptly release to the Terminator the related Asset Files or portions thereof
in their respective possessions for the remaining Assets, Repo Properties and
REO Properties, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effectuate transfer of such Asset Files to such
Terminator, whereupon the Trust shall terminate.
(e) In the event that all of the Certificateholders shall not surrender
their Certificates within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates and receive
the final distribution with respect thereto, net of the cost of such second
notice. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the amounts otherwise payable on such
Certificates. Any funds payable to Certificateholders that are not distributed
on the final Distribution Date shall be deposited in a Termination Account, as
the case may be, each of which shall be an Eligible Account, to be held for the
benefit of Certificateholders not presenting and surrendering their Certificates
in the aforesaid manner, and shall be disposed of in accordance with this
Section.
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Section 9.02. Additional Termination Requirements.
(a) In the event of a Terminating Purchase as provided in Section 9.01
hereof, the Trust shall be terminated in accordance with the following
additional requirements, unless the Servicer, the Company, and the Trustee
receive (1) a Special Tax Opinion and (2) a Special Tax Consent from each of the
Holders of the Residual Certificates (unless the Special Tax Opinion
specifically provides that no REMIC-level tax will result from such Terminating
Purchase).
(1) Within 90 days prior to the time of the making of the
final payment on the Certificates, the Company on behalf of each
related REMIC shall adopt a plan of complete liquidation meeting the
requirements set forth in the REMIC Provisions for a qualified
liquidation (which plan may be adopted by the Trustee's attachment of a
statement specifying the first day of the 90-day liquidation period to
the REMIC's final federal income tax return) and the REMIC will sell
all of its assets (other than cash).
(2) At the time of the making of the final payment on the
Regular Certificates or the deposit to the Termination Account, the
Trustee shall distribute or credit, or cause to be distributed or
credited, PRO RATA, to the Holders of the Residual Certificates, all
remaining cash on hand relating to the REMIC after such final payment
(other than cash retained to meet claims against the Trust) and the
REMIC shall terminate at that time.
(3) In no event may the final payment on the Regular
Certificates or the final distribution or credit to the Holders of the
Residual Certificates be made after the 90th day after the date on
which the plan of complete liquidation relating thereto is adopted. A
payment into the Termination Account with respect to any Certificate
pursuant to Section 9.01 hereof shall be deemed a final payment on, or
final distribution with respect to, such Certificate for the purposes
of this Section 9.02(a)(3).
(b) By their acceptance of Residual Certificates, the Holders thereof agree
(1) to authorize such action as may be necessary to adopt a plan of complete
liquidation of any related REMIC and (2) to take such action as may be necessary
to adopt a plan of complete liquidation of any related REMIC upon the written
request of the Servicer, which authorization shall be binding upon all successor
Holders of such Residual Certificates.
ARTICLE X
REMIC TAX PROVISIONS
Section 10.01. REMIC Administration.
Unless otherwise specified in the related Pooling and Servicing Agreement,
an election will be made to treat the Assets and the Distribution Account
underlying a Series as one or more REMICs under the Code. Each Holder of a
Residual Certificate in each REMIC shall, in its Residual Transferee Agreement,
designate the Servicer or an Affiliate of the Servicer, as its agent, to act as
the Tax Matters Person for such REMIC. The Servicer agrees that it or one of its
Affiliates will serve as such Tax Matters Person for each REMIC, and also will
perform various tax administration functions for each REMIC, as its agent, as
set forth in this Section 10.01.
(a) The Trustee shall elect (on behalf of each REMIC to be created) to have
the Trust (or
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designated assets thereof) treated as a REMIC on Form 1066 or other appropriate
federal tax or information return for the taxable year ending on the last day of
the calendar year in which the Certificates are issued as well as on any
corresponding state tax or information return necessary to have such assets
treated as a REMIC under relevant state law.
(b) The Servicer shall pay any and all tax related expenses (not including
taxes) of the Trust and each related REMIC, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to each such REMIC that involve the Internal
Revenue Service or state tax authorities or related to the adoption of a plan of
complete liquidation.
(c) The Servicer shall prepare any necessary forms for election as well as
all of the Trust's and each related REMIC's federal and state tax and
information returns. At the request of the Servicer, the Trustee shall sign and
file such returns on behalf of each such REMIC. The expenses of preparing and
filing such returns shall be borne by the Servicer.
(d) The Servicer shall perform all reporting and other tax compliance duties
that are the responsibility of the Trust and the REMIC under the REMIC
Provisions or state or local tax law. Among its other duties, if required by the
REMIC Provisions, the Servicer, acting as agent of the REMIC, shall provide (1)
to the Treasury or to other governmental authorities such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization and (2) to the Trustee such
information as is necessary for the Trustee to discharge its obligations under
the REMIC Provisions to report tax information to the Certificateholders.
(e) The Company, the Servicer, the Trustee (to the extent the Trustee has
been instructed by the Company or the Servicer), and the Holders of Residual
Certificates shall take any action or cause each related REMIC to take any
action necessary to create or maintain the status of each such REMIC as a REMIC
under the REMIC Provisions and shall assist each other as necessary to create or
maintain such status.
(f) The Company, the Servicer, the Trustee (to the extent the Trustee has
been instructed by the Company or the Servicer), and the Holders of the Residual
Certificates shall not take any action or fail to take any action, or cause each
related REMIC to take any action or fail to take any action that, if taken or
not taken, could endanger the status of each such REMIC as a REMIC unless the
Trustee and the Servicer have received an Opinion of Counsel (at the expense of
the party seeking to take or to omit to take such action) to the effect that the
contemplated action or failure to act will not endanger such status.
(g) Any taxes that are imposed upon the Trust or any related REMIC by
federal or state (including local) governmental authorities (other than taxes
paid by a party pursuant to Section 10.02 hereof or as provided in the following
sentence) shall be allocated to the Certificates (including, for this purpose,
the regular interests in any Pooling REMIC) in the same manner as Writedown
Amounts are so allocated; PROVIDED, HOWEVER, that if the related Pooling and
Servicing Agreement does not provide for the allocation of Writedown Amounts,
such taxes shall be payable out of the Available Distribution Amount before any
distributions are made on the related Certificates on the related Distribution
Date. Any state or local taxes imposed upon the Trust, any related REMIC or any
related Certificateholder that would not have been imposed on the Trust, such
REMIC or such Certificateholder in the absence of any legal or business
connection between the Trustee and the state or locality imposing such taxes
(including any federal, state or local taxes imposed on such Trust, such REMIC
or such Certificateholder as a result of such Trust, such REMIC or such
Certificateholder being deemed to have received income as a result of the
Trustee's payment of state or local taxes) shall be paid by the Trustee, and,
notwithstanding anything
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to the contrary in these Standard Terms, such taxes shall be deemed to be part
of the Trustee's cost of doing business and shall not be reimbursable to the
Trustee.
(h) If the Servicer (or an Affiliate thereof) is unable for any reason to
fulfill its duties as Tax Matters Person, then the holder of the largest
Percentage Interest of the Residual Certificates, without compensation, shall
become the successor Tax Matters Person for each related REMIC; PROVIDED,
HOWEVER, that in no event shall the Trustee be required to act as Tax Matters
Person (regardless of whether the Trustee is acting as successor Servicer).
Section 10.02. Prohibited Activities.
Except as otherwise provided elsewhere in the Pooling and Servicing
Agreement, neither the Company, the Servicer, the Holders of Residual
Certificates, nor the Trustee shall engage in, nor shall the Trustee permit, any
of the following transactions or activities unless it has received (1) a Special
Tax Opinion and (2) a Special Tax Consent from each of the Holders of the
Residual Certificates (unless the Special Tax Opinion specially provides that no
REMIC-level tax will result from the transaction or activity in question):
(a) the sale or other disposition of, or substitution for, any
of the underlying Assets except pursuant to (1) a foreclosure or
default with respect to such an Asset, (2) a purchase or repurchase
pursuant to Section 2.06 hereof, (3) the bankruptcy or insolvency of
any related REMIC, or (4) the termination of any related REMIC pursuant
to Article IX hereof;
(b) the acquisition of any Assets for the Trust after the
related Closing Date except (1) during the three-month period beginning
on the Closing Date pursuant to a fixed-price contract in effect on the
Closing Date that has been reviewed and approved by tax counsel
acceptable to the Servicer or (2) a substitution in accordance with
Section 2.06 hereof;
(c) the sale or other disposition of any investment in the
Distribution Account at a gain;
(d) the acceptance of any contribution to the Trust except the
following cash contributions: (1) a cash contribution received during
the three-month period beginning on the Closing Date; (2) a cash
contribution to facilitate a Terminating Purchase that is made within
the 90-day period beginning on the date on which a plan of complete
liquidation is adopted pursuant to Section 9.02(a)(1) hereof; (3) a
contribution to a Reserve Fund owned by a related REMIC that is made
PRO RATA by the Holders of the Residual Certificates; or (4) any other
contribution approved by the Servicer after consultation with tax
counsel;
(e) except in the case of an Asset that is in default, or as
to which, in the reasonable judgment of the Servicer, default is
reasonably foreseeable, neither the Trustee nor the Servicer shall
permit any modification of any material term of an Asset (including,
but not limited to, the interest rate, the principal balance, the
amortization schedule (except as provided in the Pooling and Servicing
Agreement), the remaining term to maturity, or any other term affecting
the amount or timing of payments on the Asset) unless the Trustee and
Servicer have received an Opinion of Counsel (at the expense of the
party seeking to modify the Asset) to the effect that such modification
would not be treated as giving rise to a new debt instrument for REMIC
purposes;
(f) any other transaction or activity that is not contemplated
by the Pooling and Servicing Agreement;
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(g) the sale or other disposition of any asset held in a
Reserve Fund for a period of less than three months (a "Short-Term
Reserve Fund Investment") if such sale or disposition would cause 30%
or more of a related REMIC's income from all of its Reserve Funds for
the taxable year to consist of gain from the sale or disposition of
Short-Term Reserve Fund Investments; or
(h) the withdrawal of any amounts from any Reserve Fund except
(A) for the distribution pro rata to the Holders of the Residual
Certificates or (B) to provide for the payment of Trust expenses or
amounts payable on the Certificates in the event of defaults or late
payments on the related Assets or lower than expected returns on funds
held in the Distribution Account, as provided under section 860G(a)(7)
of the Code.
Any party causing the Trust to engage in any of the activities prohibited in
this Section shall be liable for the payment of any tax imposed on the Trust
pursuant to Code section 860F(a)(1) or 860G(d) as a result of the Trust engaging
in such activities.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendments.
The Pooling and Servicing Agreement may be amended or supplemented from time
to time by the Company, the Servicer and the Trustee without the consent of any
of the Certificateholders (a) to cure any ambiguity herein, (b) to correct or
supplement any provisions herein that may be inconsistent with any other
provisions herein, (c) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of any related REMIC as a REMIC under the Code at all times that any
Certificates are outstanding or (d) to make any other provisions with respect to
matters or questions arising under the Pooling and Servicing Agreement or
matters arising with respect to the Trust that are not covered by the Pooling
and Servicing Agreement; provided, that such action shall not affect adversely
the interests of any Certificateholder, as evidenced by an opinion of counsel
independent from the Company, the Servicer and the Trustee or a letter from each
Rating Agency from whom the Company requested a rating of any of the related
Certificates stating that such action will not result in a downgrading of the
rating of any of the related Certificates rated by such Rating Agency at the
request of the Company. Promptly after the execution of any such amendment, the
Trustee shall furnish a copy of such amendment to each Holder of Certificates.
The Pooling and Servicing Agreement also may be amended from time to time by
the Company, the Servicer and the Trustee with the consent of the Holders
entitled to at least a majority of the Voting Rights of each Class of
Certificates that would be affected by such amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Pooling and Servicing Agreement or of modifying in any manner the rights
of the Holders of the Certificates; PROVIDED, HOWEVER, that no such amendment
shall (a) reduce in any manner the amount of, or delay the timing of, payments
received on Contracts or Mortgage Loans that are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (b)
affect adversely in any material respect the interests of the Holders of any
Class of Certificates in a manner other than described in clause (a) of this
paragraph, without the consent of the Holders of Certificates of such Class
evidencing at least 66 % of the Voting Rights with respect to such Class, or (c)
reduce the aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment, without the consent of such Holders
of all Certificates then outstanding.
It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
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<PAGE>
Section 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, the Pooling and Servicing
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Real Property or Mortgaged Properties included in the Trust
Estate and subject to the related Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer and at its expense, but only upon direction of the
Trustee accompanied by an Opinion of Counsel to the effect that such recordation
is necessary to protect the interests of the Certificateholders. The Trustee
shall not be responsible for determining whether the Pooling and Servicing
Agreement should be recorded in any such office.
For the purpose of facilitating the recordation of the Pooling and Servicing
Agreement as herein provided and for other purposes, the Pooling and Servicing
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall together constitute but one and the same instrument.
Section 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate the Pooling and Servicing Agreement or the Trust, nor will such death
or incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor shall it otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to the Pooling and Servicing Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of the
Pooling and Servicing Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to the Pooling and Servicing
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates entitled to at least 25%
of the Voting Rights allocated to the Certificates shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee under the Pooling and Servicing Agreement and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee, for
15 days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding. It
is understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more Holders
of Certificates shall have any right in any manner whatever by virtue of any
provision of the Pooling and Servicing Agreement to affect, disturb or prejudice
the rights of the Holders of any other of such Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under the Pooling and Servicing Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Certificates. For the protection and enforcement of the provisions of
this Section, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
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<PAGE>
Section 11.04. Notices.
All demands and notices under the Pooling and Servicing Agreement shall be
in writing and shall be deemed to have been duly given if personally delivered
at or mailed by first class mail, postage prepaid, or by express delivery
service, to (a) in the case of the Company, 7800 McCloud Road, Greensboro, North
Carolina 27409-9634, Attention: Treasurer, telecopy number (910) 664-2400, or
such other address or telecopy number as may hereafter be furnished to each
party to the Pooling and Servicing Agreement in writing by the Company, in
the case of OAC or the Servicer, 7800 McCloud Road, Greensboro, North Carolina
27409-9634, Attention: Treasurer, telecopy number (910) 664-3224, or such other
address or telecopy number as may subsequently be furnished to each party to the
Pooling and Servicing Agreement in writing by the Servicer and (c) in the case
of the Trustee, at its address set forth in the Pooling and Servicing Agreement
or such other address or telecopy number as may subsequently be furnished to
each party to the Pooling and Servicing Agreement in writing by the Trustee.
Copies of all such notices also shall be mailed, delivered or telegraphed and
confirmed to Deutsche Financial Services Corporation, 655 Maryville Centre
Drive, St. Louis, MO 63141-5832, Attention: Treasurer. Any notice required or
permitted to be mailed to a Certificateholder shall be given by registered mail,
postage prepaid, or by express delivery service, at the address of such Holder
as shown in the Certificate Register. Any notice so mailed within the time
prescribed in the Pooling and Servicing Agreement shall be conclusively presumed
to have been duly given, whether or not the Certificateholder receives such
notice. A copy of any notice required to be telecopied hereunder also shall be
mailed to the appropriate party in the manner set forth above. A copy of any
notice given hereunder to any other party shall be delivered to the Trustee.
Section 11.05. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of the
Pooling and Servicing Agreement shall be held invalid for any reason whatsoever,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of the Pooling and
Servicing Agreement and shall in no way affect the validity or enforceability of
the other provisions of the Pooling and Servicing Agreement or of the
Certificates or the rights of the Holders thereof.
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<PAGE>
Section 11.06. Sale of Contracts.
It is the express intent of the Company and the Trustee that the conveyance
of the Assets underlying a Series by the Company to the Trustee pursuant to the
related Pooling and Servicing Agreement be construed as a sale of such Assets by
the Company to the Trustee. It is, further, not the intention of the Company or
the Trustee that such conveyance be deemed a pledge of such Assets by the
Company to the Trustee to secure a debt or other obligation of the Company.
However, in the event that, notwithstanding the intent of the parties, such
Assets are held to continue to be property of the Company, then (a) the Pooling
and Servicing Agreement also shall be deemed to be a security agreement within
the meaning of Article 9 of the applicable UCC; (b) the conveyance by the
Company provided for in the Pooling and Servicing Agreement shall be deemed to
be a grant by the Company to the Trustee of a security interest in all of the
Company's right, title and interest in and to the Assets and all amounts payable
to the holders of the Assets in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the related Certificate Account or Distribution Account, whether in the form
of cash, instruments, securities or other property, and including without
limitation all amounts from time to time held or invested in any related Reserve
Fund; (c) the possession by the Trustee or its agent (including the Servicer
pursuant to Section 2.02(a) hereof) of items of property that constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the applicable UCC; and (d) notifications
to persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. The Company and the Trustee (to the
extent the Trustee has been instructed by the Company or the Servicer) shall
take, to the extent consistent with the Pooling and Servicing Agreement, such
actions as may be necessary to ensure that, if the Pooling and Servicing
Agreement were deemed to create a security interest in the related Assets, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Pooling and Servicing Agreement.
Section 11.07. Notice to Rating Agency.
(a) The Trustee shall use its best efforts promptly to provide notice to
each applicable Rating Agency and each Certificateholder with respect to each of
the following of which it has actual knowledge, except that no notice specified
below need be sent to any such Certificateholder or each applicable Rating
Agency if already sent pursuant to other provisions of the Pooling and Servicing
Agreement:
(1) any amendment to the Pooling and Servicing Agreement or
any agreement assigned to the Trust;
(2) the occurrence of any Event of Default involving the
Servicer that has not been cured or waived;
(3) the resignation, termination or merger of the Company, the
Servicer or the Trustee;
(4) the purchase or repurchase or substitution of Contracts
pursuant to Section 2.06 hereof;
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<PAGE>
(5) the final payment to the Certificateholders;
(6) any change in the location of the related Certificate
Account or the Distribution Account;
(7) any event that would result in the inability of the
Servicer to make Advances regarding the related Assets;
(8) any change in applicable law that would require an
assignment of a Mortgage, not previously recorded, to be recorded in
order to protect the right, title and interest of the Trustee in and to
the related Real Property or Mortgaged Property or, in case a court
should recharacterize the sale of the related Asset as a financing, to
perfect a first priority security interest in favor of the Trustee in
the related Asset or the occurrence of either of the circumstances
described in clause (1) or (2) of Section 2.06(b) hereof relating to
the retitling of Manufactured Homes; or
(9) any change in the Company's or the Servicer's name or
place of business or the relocation of the Contract Files or Servicer
Contract Files or the Servicer Mortgage Loan Files to a location
outside the State of North Carolina or the relocation of the Trustee
Mortgage Loan Files to a location outside of the state where they are
originally held by the Trustee or its Custodian.
(b) The Servicer shall promptly notify the Trustee of any of the events
listed in Section 11.07(a) hereof of which it has actual knowledge. In addition,
the Trustee shall furnish promptly to each Rating Agency, at its address set
forth in the Pooling and Servicing Agreement, copies of the following:
(i) Each Remittance Report; and
(ii) Each Officer's Certificate supplied by the Servicer to
the Trustee and the Certificateholders pursuant to Section 3.13 hereof.
(c) Any notice pursuant to this Section 11.07 shall be in writing and shall
be deemed to have been duly given if personally delivered or mailed by first
class mail, postage prepaid or by express delivery service to each Rating Agency
at its address specified in the Pooling and Servicing Agreement.
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EXHIBIT 1
FORM OF SERVICER'S CUSTODIAL CERTIFICATION
[DATE]
[NAME AND ADDRESS
OF TRUSTEE]
Pooling and Servicing Agreement, dated
as of ____________, among
Deutsche Financial Capital Securitization LLC (the "Company"),
Oakwood Acceptance Corporation and
______________, as Trustee
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Company's Standard Terms to
Pooling and Servicing Agreement (June 1997 Edition), which are incorporated by
reference into the above-referenced Pooling and Servicing Agreement (the
"Agreement"), Oakwood Acceptance Corporation, as Servicer under the Agreement,
hereby confirms that it is in possession of a complete Contract File for each of
the Contracts identified on Schedule I to the Agreement, subject to those
exceptions identified on the schedule attached hereto. Capitalized terms used
and not otherwise defined herein shall have the respective meanings assigned to
such terms in the Agreement.
OAKWOOD ACCEPTANCE CORPORATION
By:_____________________________________________
Name:___________________________________________
Title:____________________________________________
Exhibit 1 - Page 1
<PAGE>
EXHIBIT 2-A
FORM OF INITIAL CERTIFICATION
[Date]
Deutsche Financial Capital Securitization LLC
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [_______________]
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [________________]
Re: Pooling and Servicing Agreement, dated as of _________ 1, 19___,
among Deutsche Financial Capital Securitization LLC
Oakwood Acceptance Corporation, as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, __________________
DFCS Trust 19_____-_____.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to Pooling
and Servicing Agreement (June 1997 Edition) (the "Standard Terms"), which are
incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule to the Pooling and Servicing
Agreement (other than any Mortgage Loan paid in full or listed on the attachment
hereto) it, or a Custodian on its behalf, has reviewed the Trustee Mortgage Loan
File and has determined that, except as noted on the Schedule of Exceptions
attached hereto: (i) all documents required to be included in the Trustee
Mortgage Loan File (as set forth in the definition of "Trustee Mortgage Loan
File" in the Standard Terms) are in its possession or in the possession of a
Custodian on its behalf; (ii) such documents have been reviewed by it, or a
Custodian on its behalf, and appear regular on their face and relate to such
Mortgage Loan; and (iii) based on examination by it, or by a Custodian on its
behalf, and only as to such documents, the information set forth on the Mortgage
Loan Schedule to the Pooling and Servicing Agreement accurately reflects the
information set forth in the Trustee Mortgage Loan File. The undersigned further
certifies that the Trustee's review, or the review of its Custodian, of each
Trustee Mortgage Loan File included each of the procedures listed in Section
2.03(c)(2) of the Standard Terms.
Except as described herein, neither the Trustee, nor any Custodian on its
behalf, has made an independent examination of any documents contained in any
Trustee Mortgage Loan File. The Trustee makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any documents
contained in any Trustee Mortgage Loan File for any of the Mortgage Loans listed
on the Mortgage Loan Schedule to the Pooling and Servicing Agreement, (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Trustee Mortgage Loan File should include any
assumption agreement, modification agreement, written assurance or substitution
agreement.
Exhibit 2-A - Page 1
<PAGE>
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the above-captioned Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement").
[TRUSTEE]
By:___________________________
Its:__________________________
Exhibit 2-A - Page 2
<PAGE>
EXHIBIT 2-B
FORM OF FINAL CERTIFICATION
[Date]
Deutsche Financial Capital Securitization LLC
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [_______________]
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [________________]
Re: Pooling and Servicing Agreement, dated as of _________ 1, 19___,
among Deutsche Financial Capital Securitization LLC
Oakwood Acceptance Corporation, as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, __________________
DFCS Trust 19_____-_____.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to Pooling
and Servicing Agreement (June 1997 Edition) (the "Standard Terms"), which are
incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that, except as noted
on the Schedule of Exceptions attached hereto, for each Mortgage Loan listed in
the Mortgage Loan Schedule to the Pooling and Servicing Agreement (other than
any Mortgage Loan paid in full or listed on the attachment hereto) it, or a
Custodian on its behalf, has received a complete Trustee Mortgage Loan File
which includes each of the documents required to be included in the Trustee
Mortgage Loan File as set forth in the definition of "Trustee Mortgage Loan
File" in the Standard Terms.
Neither the Trustee nor any Custodian on its behalf has made an independent
examination of any documents contained in any Trustee Mortgage Loan File beyond
the review specifically required in the above captioned Pooling and Servicing
Agreement. The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
contained in any Trustee Mortgage Loan File or any of the Mortgage Loans listed
on the Mortgage Loan Schedule, (ii) the collectibility, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Trustee Mortgage Loan File should include any assumption agreement, modification
agreement, written assurance or substitution agreement.
Exhibit 2-B - Page 1
<PAGE>
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the above-captioned Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement").
[TRUSTEE]
By:___________________________
Its:__________________________
Exhibit 2-B - Page 2
<PAGE>
EXHIBIT 3
FORM OF RECORDATION REPORT
[Date]
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Attention: [________________]
Re: Pooling and Servicing Agreement, dated as of _________ 1, 19___,
among Deutsche Financial Capital Securitization LLC
Oakwood Acceptance Corporation, as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, __________________
DFCS Trust 19_____-_____.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to Pooling
and Servicing Agreement (June 1997 Edition) (the "Standard Terms"), which are
incorporated by reference into the above-referenced Pooling and Servicing
Agreement, the undersigned, as Trustee hereby notifies you, that as of the date
hereof with respect to the following Mortgage Loans it has not received the
indicated documents:
MORTGAGE LOANS DOCUMENTS NOT RECEIVED
------------------------------------------
ORIGINAL RECORDED
ORIGINAL RECORDED ASSIGNMENT OF
MORTGAGE MORTGAGE
OR CERTIFIED COPY OR CERTIFIED COPY
OAC LOAN NUMBER THEREOF THEREOF*
[TRUSTEE]
as Trustee
By:___________________________
Its:__________________________
- -------------------------------
* NOT REQUIRED FOR MORTGAGE LOANS WHICH THE COMPANY HAS WAIVED RECORDATION OF
ASSIGNMENTS.
Exhibit 3 - Page 1
<PAGE>
EXHIBIT 4
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
TO: [Name and Address of Trustee or Custodian]
RE: Pooling and Servicing Agreement, dated as
of __________ 1, 19__, among
Deutsche Financial Capital Securitization LLC (the
"Company"), Oakwood Acceptance Corporation, as
Servicer, and ____________________, as Trustee,
which incorporates by reference the Company's
Standard Terms to Pooling and Servicing Agreement
(June 1997 Edition) (collectively, the "Pooling and
Servicing Agreement")
In connection with the administration of the Mortgage Loans
held by you as the Trustee or Custodian, we request the release and
acknowledge receipt, of the Trustee Mortgage Loan File [specify
documents if only a partial Trustee Mortgage Loan File is being
released]) for the Mortgage Loan described below, for the reason
indicated.
Mortgagor's Name and Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
___ 1. Mortgage Loan Paid in Full. (The Servicer
hereby certifies that all amounts received in
connection therewith have been deposited into the
applicable Certificate Account as provided in the
Pooling and Servicing Agreement.)
___ 2. Mortgage Loan Liquidated by
_________________. (The Servicer hereby certifies
that all proceeds of foreclosure, insurance,
condemnation or other liquidation have been finally
received.)
___ 3. Mortgage Loan in Foreclosure.
___ 4. Other (explain).
_______________________________
If item 1 or 2 above is checked, and if all or part of the
Trustee Mortgage Loan File was previously released to us, please
release to us our previous request and receipt on file with you, as
well as any additional documents in your possession relating to the
specified Mortgage Loan.
If item 3 or 4 above is checked, upon our return of all of
the above documents to you as the Trustee or Custodian, please
acknowledge your receipt by signing in the space indicated below, and
returning this form.
<PAGE>
Exhibit 4 - Page 1
Capitalized terms used herein but not defined herein have
the meanings ascribed to them in the Pooling and Servicing Agreement.
OAKWOOD ACCEPTANCE CORPORATION,
as Servicer
By:
_______________________________
Name:
_______________________________
Title:_____________________________
Date:
______________________________
Acknowledgment of Documents returned to the Trustee or Custodian:
NAME OF TRUSTEE OR CUSTODIAN
By:
____________________________
Name:
____________________________
Title:
____________________________
Date:
___________________________
PAGE
<PAGE>
Exhibit 5 - Page 1
EXHIBIT 5
RULE 144A AGREEMENT--QIB CERTIFICATION
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC, SERIES 19__-_
PASS-THROUGH CERTIFICATES, CLASS ___
________________
(DATE)
[Name and Address of
the Trustee]
Deutsche Financial Capital Securitization LLC
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, NC 27409
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the
captioned securities (the "Purchased Certificates"), the undersigned
(the "Transferee") hereby certifies and covenants to the transferor,
Deutsche Financial Capital Securitization LLC (the "Company"), the
Servicer, the Trustee and the Trust as follows:
1. The Transferee is a "qualified institutional buyer"
as that term is defined in Rule 144A ("Rule 144A") promulgated under
the Securities Act of 1933, as amended (the "1933 Act") and has
completed the form of certification to that effect attached hereto as
Annex A1 (if the Transferee is not a registered investment company)
or Annex A2 (if the Transferee is a registered investment company).
The Transferee is aware that the sale to it is being made in reliance
on Rule 144A.
2. The Transferee understands that the Purchased
Certificates have not been registered under the 1933 Act or
registered or qualified under any state securities laws and that no
transfer may be made unless the Purchased Certificates are registered
under the 1933 Act and under applicable state law or unless an
exemption from such registration is available. The Transferee
further understands that neither the Company, the Servicer, the
Trustee nor the Trust is under any obligation to register the
Purchased Certificates or make an exemption from such registration
available.
3. The Transferee is acquiring the Purchased
Certificates for its own account or for the account of a "qualified
institutional buyer" (as defined in Rule 144A, a "QIB"), and
understands that such Purchased Certificates may be resold, pledged
or transferred only (a) to a person reasonably believed to be such a
QIB that purchases for its own account or for the account of a QIB to
whom notice is given that the resale, pledge or transfer is being
made in reliance on Rule 144A, or (b) pursuant to another exemption
from registration under the 1933 Act and under applicable state
securities laws. IN ADDITION, SUCH TRANSFER MAY BE SUBJECT TO
ADDITIONAL RESTRICTIONS, AS SET FORTH IN SECTION 5.05 OF THE STANDARD
TERMS TO THE POOLING AND SERVICING AGREEMENT (THE "STANDARD TERMS")
REFERRED TO BELOW. By its execution of this agreement, the
Transferee agrees that it will not resell, pledge or transfer any of
the Purchased Certificates to anyone otherwise than in strict
compliance with Rule 144A, or pursuant to another exemption from
registration under the 1933 Act and all applicable state securities
laws, and in strict compliance with the transfer restrictions set
forth in Section 5.05 of the Standard Terms. The
Exhibit 5 - Page 1
<PAGE>
Transferee will not attempt to transfer any or all of the Purchased Certificates
pursuant to Rule 144A unless the Transferee offers and sells such Certificates
only to QIBs or to offerees or purchasers that the Transferee and any
person acting on behalf of the Transferee reasonably believe (as
described in paragraph (d)(l) of Rule 144A) is a QIB.
4. The Transferee has been furnished with all
information that it requested regarding (a) the Purchased
Certificates and distributions thereon and (b) the Pooling and
Servicing Agreement referred to below.
5. If applicable, the Transferee has complied, will
comply in all material respects with applicable regulatory guidelines
relating to the ownership of mortgage derivative products.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and
Servicing Agreement, dated as of _____________ 1, 19__, which
incorporates by reference the Standard Terms thereto (June 1997
Edition), among the Company, Oakwood Acceptance Corporation and
____________________, as Trustee, pursuant to which the Purchased
Certificates were issued.
IN WITNESS WHEREOF, the undersigned has caused this Rule
144A Agreement to be executed by its duly authorized representative
as of the day and year first above written.
[TRANSFEREE]
By:
__________________________
Name:
_________________________
Title:
__________________________
Exhibit 5 - Page 2
<PAGE>
<PAGE>
Annex A1 to Exhibit 5
TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the
President, Chief Financial Officer, Senior Vice President or other
executive officer of the Transferee.
2. The Transferee is a "qualified institutional buyer"
as that term is defined in Rule 144A ("Rule 144A") promulgated under
the Securities Act of 1933, as amended (the "1933 Act"), because (a)
the Transferee owned and/or invested on a discretionary basis at
least $____________ in securities [Note to reviewer - the amount in
the previous blank must be at least $100,000,000 unless the
Transferee is a dealer, in which case the amount filled in the
previous blank must be at least $10,000,000.] (except for the
excluded securities referred to in paragraph 3 below) as of
_______________ [specify a date on or since the end of the
Transferee's most recently ended fiscal year] (such amount being
calculated in accordance with Rule 144A) and (b) the Transferee meets
the criteria listed in the category marked below.
______ Corporation, etc. The Transferee is an
organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, a
corporation (other than a bank as defined in
Section 3(a)(2) of the 1933 Act or a savings and
loan association or other similar institution
referenced in Section 3(a)(5)(A) of the Act), a
partnership, or a Massachusetts or similar business
trust.
_____ Bank. The Transferee (a) is a national
bank or banking institution as defined in Section
3(a)(2) of the 1933 Act and is organized under the
laws of a state, territory or the District of
Columbia. The business of the Transferee is
substantially confined to banking and is supervised
by the appropriate state or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements as of a
date not more than 16 months preceding the date of
this certification in the case of a U.S. bank, and
not more than 18 months preceding the date of this
certification in the case of a foreign bank or
equivalent institution, a copy of which financial
statements is attached hereto.
_____ Savings and Loan. The Transferee is a
savings and loan association, building and loan
association, cooperative bank, homestead
association or similar institution referenced in
Section 3(a)(5)(A) of the 1933 Act. The Transferee
is supervised and examined by a state or federal
authority having supervisory authority over any
such institutions or is a foreign savings and loan
association or equivalent institution and has an
audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements as of a date not more than 16 months
preceding the date of this certification in the
case of a U.S. savings and loan association or
similar institution, and not more than 18 months
preceding the date of this certification in the
case of a foreign savings and loan association or
equivalent institution, a copy of which financial
statements is attached hereto.
_____ Broker-dealer. The Transferee is a dealer
registered pursuant to Section 15 of the
Exhibit 5 - Page 3
<PAGE>
Certificates Exchange Act of 1934, as amended (the
"1934 Act").
_____ Insurance Company. The Transferee is an
insurance company as defined in Section 2(13) of
the 1933 Act, whose primary and predominant
business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by
the insurance commissioner or a similar official or
agency of a state, territory or the District of
Columbia.
_____ State or Local Plan. The Transferee is a
plan established and maintained by a state, its
political subdivisions, or any agency or
instrumentality of a state or its political
subdivisions, for the benefit of its employees.
_____ ERISA Plan. The Transferee is an employee
benefit plan within the meaning of Title I of the
Employee Retirement Income Certificate Act of 1974,
as amended.
_____ Investment Adviser. The Transferee is an
investment adviser registered under the Investment
Advisers Act of 1940, as amended.
_____ Other. The Transferee qualifies as a "qualified
institutional buyer" as defined in Rule 144A on the
basis of facts other than those listed in any of
the entries above. If this response is marked, the
Transferee must certify on additional pages, to be
attached to this certification, to facts that
satisfy the Servicer that the Transferee is a
"qualified institutional buyer" as defined in Rule
144A.
3. The term "securities" as used herein does not
include (a) securities of issuers that are affiliated with the
Transferee, (b) securities constituting the whole or part of an
unsold allotment to or subscription by the Transferee, if the
Transferee is a dealer, (c) bank deposit notes and certificates of
deposit, (d) loan participations, (e) repurchase agreements, (f)
securities owned but subject to a repurchase agreement and (g)
currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the
Transferee, the Transferee used the cost of such securities to the
Transferee and did not include any of the securities referred to in
the preceding paragraph. Further, in determining such aggregate
amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are
consolidated with the Transferee in its financial statements prepared
in accordance with generally accepted accounting principles and if
the investments of such subsidiaries are managed under the
Transferee's direction. However, such securities were not included
if the Transferee is a majority-owned, consolidated subsidiary of
another enterprise and the Transferee is not itself a reporting
company under the 1934 Act.
5. The Transferee acknowledges that it is familiar
with Rule 144A and understands that the Transferor and other parties
related to the Purchased Certificates are relying and will continue
to rely on the statements made herein because one or more sales to
the Transferee may be made in reliance on Rule 144A.
6. Will the Transferee be
purchasing the Purchased Certificates only ______ _____
for the Transferee's own account? ______ _____
YES NO
Exhibit 5 - Page 4
<PAGE>
If the answer to the foregoing question is "NO", the
Transferee agrees that, in connection with any purchase of securities
sold to the Transferee for the account of a third party (including
any separate account) in reliance on Rule 144A, the Transferee will
only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a
current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such
third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to
which this certification is made of any changes in the information
and conclusions herein. Until such notice is given, the Transferee's
purchase of the Purchased Certificates will constitute a
reaffirmation of this certification as of the date of such purchase.
In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they
become available.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be executed by its duly authorized representative this
____ day of ___________, 19____.
_____________________________
Print Name of Transferee
By:
____________________________
Name:
____________________________
Title:
____________________________
Date:
____________________________
Exhibit 5 - Page 5
PAGE
<PAGE>
Annex A2 to Exhibit 5
REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the
President, Chief Financial Officer or Senior Vice President of the
entity purchasing the Purchased Certificates (the "Transferee") or,
if the Transferee is part of a Family of Investment Companies (as
defined in paragraph 3 below), is an officer of the related
investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer"
as that term is defined in Rule 144A ("Rule 144A") promulgated under
the Securities Act of 1933, as amended (the "1933 Act"), because (a)
the Transferee is an investment company (a "Registered Investment
Company") registered under the Investment Company Act of 1940, as
amended (the "1940 Act") and (b) as marked below, the Transferee
alone, or the Transferee's Family of Investment Companies, owned at
least $___________ [Note to reviewer - the amount in the previous
blank must be at least $100,000,000] in securities (other than the
excluded securities referred to in paragraph 4 below) as of
________________ [specify a date on or since the end of the
Transferee's most recently ended fiscal year]. For purposes of
determining the amount of securities owned by the Transferee or the
Transferee's Family of Investment Companies, the cost of such
securities to the Transferee or the Transferee's Family of Investment
Companies was used.
_____ The Transferee owned $____________ in securities (other than
the excluded securities referred to in paragraph 4 below) as
of the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
_____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $____________ in securities
(other than the excluded securities referred to in paragraph
4 below) as of the end of the Transferee's most recent
fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used
herein means two or more Registered Investment Companies except for a
unit investment trust whose assets consist solely of shares of one or
more Registered Investment Companies (provided that each series of a
"series company," as defined in Rule 18f-2 under the 1940 Act, shall
be deemed to be a separate investment company) that have the same
investment adviser (or, in the case of a unit investment trust, the
same depositor) or investment advisers (or depositors) that are
affiliated (by virtue of being majority-owned subsidiaries of the
same parent or because one investment adviser is a majority-owned
subsidiary of the other).
4. The term "securities" as used herein does not
include (a) securities of issuers that are affiliated with the
Transferee or are part of the Transferee's Family of Investment
Companies, (b) bank deposit notes and certificates of deposit, (c)
loan participations, (d) repurchase agreements, (e) securities owned
but subject to a repurchase agreement and (f) currency, interest rate
and commodity swaps.
5. The Transferee is familiar with Rule 144A and
understands that the parties to which this certification is being
made are relying and will continue to rely on the statements made
herein because one or more sales to the Transferee will be in
reliance on Rule 144A. In addition, the Transferee will only
purchase for the Transferee's own account.
Exhibit 5 - Page 6
<PAGE>
6. The undersigned will notify the parties to which
this certification is made of any changes in the information and
conclusions herein. Until such notice, the Transferee's purchase of
the Purchased Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be executed by its duly authorized representative this
____ of ____________, 19____.
____________________________________________
Print Name of Transferee or Adviser
By:_________________________________________
Name:______________________________________
Title:_______________________________________
IF AN ADVISER:
Print Name of Transferee
Date:_______________________________________
Exhibit 5 - Page 7
PAGE
<PAGE>
Exhibit 6 - Page 1
EXHIBIT 6
FORM OF TRANSFEREE AGREEMENT
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC, SERIES 19___-___
PASS-THROUGH CERTIFICATES
CLASS __
_______________
[Name of Transferee]
________________
(DATE)
[NAME AND ADDRESS OF TRUSTEE]
Deutsche Financial Capital Securitization LLC
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Re: Deutsche Financial Capital Securitization LLC,
Series 19___-____
Pass-Through Certificates, Class __, representing a
[___% Percentage Interest][$ denomination]
Ladies and Gentlemen:
The undersigned (the "Transferee") proposes to purchase all
or some of the Class __, Class __, Class __ and Class __ Certificates
(the "Purchased Certificates"), issued by the Trust established
pursuant to a pooling and servicing agreement, dated as of
____________ (the "Series Agreement"), among Deutsche Financial
Capital Securitization LLC (the "Company"), Oakwood Acceptance
Corporation ("OAC") and _____________________________, as Trustee,
which incorporates by reference the Company's Standard Terms to
Pooling and Servicing Agreement (June 1997 Edition) (the "Standard
Terms," and, collectively with the Series Agreement, the
"Agreement"). In doing so the Transferee hereby acknowledges and
agrees as follows:
SECTION 1. DEFINITIONS. Each capitalized term used herein
and not otherwise defined herein shall have the meaning ascribed to
it in the Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE
TRANSFEREE. In connection with the proposed transfer of the Purchased
Certificates, the Transferee represents and warrants to the Company,
OAC, the Servicer, the Trustee and the Trust as follows:
Exhibit 6 - Page 1
<PAGE>
(a) The Transferee is purchasing the Purchased
Certificates for its own account as principal for investment
purposes and not with a view to the distribution of the
Purchased Certificates, in whole or in part, in violation of
Section 5 of the Securities Act of 1933, as amended (the
"Act").
(b) The Transferee has knowledge in financial
and business matters and is capable of evaluating the merits
and risks of an investment in the Purchased Certificates;
the Transferee has sought such accounting, legal and tax
advice as it has considered necessary to make an informed
investment decision; and the Transferee is able to bear the
economic risk of an investment in the Purchased Certificates
and can afford a complete loss of such investment.
(c) The Transferee confirms that the Company
and the Servicer have made available to the Transferee the
opportunity to ask questions of, and receive answers from,
the Company and the Servicer concerning the Company, the
Servicer, the Trust, the purchase by the Transferee of the
Purchased Certificates and all matters relating thereto, and
to obtain additional information relating thereto that the
Company or the Servicer possesses or can acquire without
unreasonable effort or expense.
(d) The Transferee is an "accredited investor"
as defined in paragraph (1), (2), (3) or (7) of Rule 501(a)
under the Act.
SECTION 3. COVENANTS OF THE TRANSFEREE. In consideration
of the proposed transfer, the Transferee covenants with each of the
Company, OAC, the Servicer, the Trustee and the Trust as follows:
(a) The Transferee will not make a public
offering of the Purchased Certificates, and will not reoffer
or resell the Purchased Certificates in a manner that would
render the issuance and sale of the Purchased Certificates,
whether considered together with the resale or otherwise, a
violation of the Act or any state securities or "Blue Sky"
laws or require registration pursuant thereto.
(b) The Transferee agrees that, in its capacity
as a holder of the Purchased Certificates, it will assert no
claim or interest in the Contracts by reason of owning the
Purchased Certificates other than with respect to amounts
that may be properly and actually payable to the Transferee
pursuant to the terms of the Pooling and Servicing Agreement
and the Purchased Certificates.
(c) The Transferee hereby agrees to abide by
the terms of the Agreement that will be applicable to it as
a Certificateholder, including, without limitation, the
indemnification provisions contained in the second sentence
of Section 5.05(a) of the Agreement.
(d) If applicable, the Transferee will comply
in all material respects with applicable regulatory
guidelines relating to the ownership of mortgage derivative
products.
SECTION 4. TRANSFER OF PURCHASED CERTIFICATES.
(a) The Transferee understands that the Purchased
Certificates have not been registered under the Act or any state
securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the Act and under applicable state
law or unless an exemption from such registration is available. If
requested by the Servicer or the Trustee, the Transferee and the
Holder of Purchased Certificates who desires to effect this transfer
have certified to the Trustee, the Company
Exhibit 6 - Page 2
<PAGE>
and the Servicer as to the factual basis for the registration or
qualification exemption relied upon. The Transferee further understands
that neither the Company, OAC, the Servicer, the Trustee nor the Trust is
under any obligation to register the Purchased Certificates or make an
exemption from such registration available.
(b) In the event that the transfer is to be made within
three years of the date the Purchased Certificates were acquired by a
non-Affiliate of the Company from the Company or an Affiliate of the
Company, the Servicer or the Trustee may require an Opinion of
Counsel (which shall not be an expense of the Company, OAC, the
Servicer or the Trustee) that such transfer is not required to be
registered under the Act or state securities laws.
(c) Any Certificateholder desiring to effect a transfer
shall, and does hereby agree to, indemnify the Company, the Servicer
and the Trustee against any liability that may result if the transfer
is not exempt under federal or applicable state securities laws.
(d) The transfer of the Purchased Certificates may be
subject to additional restrictions, as set forth in Section 5.05 of
the Standard Terms of the Pooling and Servicing Agreement, a copy of
which is attached hereto as Annex A.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Transferee Certification and Agreement to be validly executed by its
duly authorized representative this ____ day of ___________, 19__.
_______________________________________
_______________________________________
By:_____________________________________
Its:____________________________________
Exhibit 6 - Page 3
<PAGE>
<PAGE>
Annex A to Exhibit 6
ATTACH COPY OF SECTION 5.05 OF THE
STANDARD TERMS TO POOLING AND SERVICING AGREEMENT
Exhibit 6 -- Page 4
PAGE
<PAGE>
BENEFIT PLAN AFFIDAVIT
Re: Deutsche Financial Capital Securitization
LLC, DFCS Trust ______ (the "Trust")
Pass-Through Certificates, Class ___,
Class __ and Class __
)
) ss:
)
Under penalties of perjury, I, the undersigned, declare that, to the
best of my knowledge and belief, the following representations are true,
correct, and complete.
1. That I am a duly authorized officer of __________________________, a
_________ corporation (the "Purchaser"), whose taxpayer identification number is
__________, and on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring the Class ______ Certificates ("the
Purchased Certificates"), each representing an interest in the Trust, for
certain assets of which one or more real estate mortgage investment conduit
("REMIC") elections are to be made under Section 860D of the Internal Revenue
Code of 1986, as amended (the "Code").
3. The Purchaser either:
(i) (A) is not a plan ("Plan") described in or subject to the
Department of Labor regulations set forth in 29 C.F.R. ss. 2510.3-101
(the "Plan Asset Regulations"), a person acting on behalf of a Plan, or
a person using the assets of a Plan and (B) either (I) is not an
insurance company or (II) is an insurance company, in which case none
of the funds used by the Purchaser in connection with its purchase of
the Purchased Certificates constitute plan assets as defined in the
Plan Asset Regulations ("Plan Assets") and its purchase of the
Purchased Certificates shall not result in the certificates issued by
or the assets of the Trust being deemed to be Plan Assets;
(ii) is an insurance company and (A) the Purchaser is
acquiring the Purchased Certificates with funds held in an "insurance
company general account" (as defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60"), as published in 60
Fed. Reg. 35925 (July 12, 1995)), (B) there is no Plan with respect to
which the amount of such general account's reserves and liabilities for
all contracts held by or on behalf of such Plan and all other Plans
maintained by the same employer, or its affiliates (as defined in
Section V(a)(1) of PTCE 95-60), or by the same employee organization
exceeds or will exceed 10% of the total of all reserves and liabilities
of such general account (as such amounts are determined under Section
I(a) of PTCE 95-60) at the date of acquisition, (C) the purchase of the
Purchased Certificates is not part of an agreement, arrangement, or
understanding designed to benefit a party in interest, and (D) the
conditions of Prohibited Transaction Exemption __________ [INSERT
SPECIFIC
Exhibit 7 - Page 1
<PAGE>
UNDERWRITER'S EXEMPTION OR PTE 83-1] (except for the conditions stated
in section II(A)(2) and (3) thereof) are met; or
(iii) has provided a "Benefit Plan Opinion," obtained at the
Purchaser's expense, satisfactory to the Company, the Servicer, and the
Trustee. A Benefit Plan Opinion is an opinion of counsel to the effect
that the proposed transfer will not (a) cause the assets of the Trust
to be regarded as Plan Assets, (b) give rise to a fiduciary duty under
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), on the part of the Company, the Servicer, or the Trustee, or
(c) be treated as, or result in, a prohibited transaction under Section
406 or 407 of ERISA or Section 4975 of the Code.
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement, dated as
of ____________ __, _______, which incorporates by reference the Standard Terms
thereto (June 1997 Edition), among the Company, Oakwood Acceptance Corporation,
and _________________________, as Trustee.
Exhibit 7 - Page 2
<PAGE>
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf, by its duly authorized officer this ____ day of
___________, 19__.
-----------------------------
[Name of Purchaser]
By: ____________________________________
Its: ____________________________________
Personally appeared before me ________________, known or proved to me
to be the same person who executed the foregoing instrument and to be a
_________________________ of the Purchaser, and acknowledged to me that he
executed the same as his or her free act and deed and as the free act and deed
of the Purchaser.
Subscribed and sworn before me this ______ day of ___________, ____.
- -----------------------------------
Notary Public
My commission expires:______________________________.
Exhibit 7 - Page 3
<PAGE>
EXHIBIT 8
FORM OF RESIDUAL TRANSFEREE AGREEMENT
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC, SERIES 19__-_______
PASS-THROUGH CERTIFICATES,
CLASS __
RESIDUAL TRANSFEREE
-----------------
[Name of Transferee]
----------------
(DATE)
[NAME AND ADDRESS OF TRUSTEE]
Deutsche Financial Capital Securitization LLC
Oakwood Acceptance Corporation
7800 McCloud Road
Greensboro, North Carolina 27409
Re: Deutsche Financial Capital Securitization LLC, Series
19__-____, Pass-Through Certificates, Class __, representing
a [___% Percentage Interest] [$ denomination]
Ladies and Gentlemen:
The undersigned (the "Transferee") proposes to purchase all or some of
the captioned Certificates (the "Residual Certificates"), issued by the Trust
established pursuant to a pooling and servicing agreement dated as of
__________________, 19____ (the "Series Agreement"), among Deutsche Financial
Capital Securitization LLC (the "Company"), Oakwood Acceptance Corporation
("OAC"), and _____________________________, as Trustee, which incorporates by
reference the Standard Terms thereto, June 1997 Edition (the "Standard Terms"
and, collectively with the Series Agreement, the "Agreement"). In doing so the
Transferee hereby acknowledges and agrees as follows:
SECTION 1. DEFINITIONS. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE. In
connection with the proposed transfer of the Purchased Certificates, the
Transferee represents and warrants to the Company, OAC, the Servicer, the
Trustee and the Trust as follows:
Exhibit 8 - Page 1
<PAGE>
(a) The Transferee has knowledge in financial and business
matters and is capable of evaluating the merits and risks of an
investment in the Residual Certificates; the Transferee has sought such
accounting, legal and tax advice as it has considered necessary to make
an informed decision; and the Transferee is able to bear the economic
risk of an investment in the Residual Certificates and can afford a
complete loss of such investment.
(b) The Transferee represents that (i) it understands that
each of the Residual Certificates represents for federal income tax
purposes a "residual interest" in a real estate mortgage investment
conduit (a "REMIC") and that, as the holder of the Residual
Certificates, it will be required to take into account, in determining
its taxable income, its PRO RATA share of the taxable income of the
REMIC, (ii) it understands that it may incur federal income tax
liabilities with respect to the Residual Certificates in excess of any
cash flows generated by the Residual Certificates and (iii) it has
historically paid its debts as they became due and has the financial
wherewithal and intends to continue to pay its debts as they come due
in the future, including any tax imposed on the income that it derives
from the Residual Certificates as such taxes become due.
*(c) The Transferee is acquiring the Residual Certificates for
its own account as principal and not with a view to the resale or
distribution thereof, in whole or in part, in violation of Section 5 of
the Securities Act of 1933, as amended (the "Act").
*(d) The Transferee confirms that the Company has made
available to the Transferee the opportunity to ask questions of, and
receive answers from, the Company concerning the Company, the Trust,
the purchase by the Transferee of the Residual Certificates and all
matters relating thereto, and to obtain additional information relating
thereto that the Company possesses or can acquire unreasonable effort
or expense.
SECTION 3. COVENANTS. The Transferee covenants:
*(a) The Transferee will not make a public offering of the
Residual Certificates, and will not reoffer or resell the Residual
Certificates in a manner that would render the issuance and sale of the
Residual Certificates whether considered together with the resale or
otherwise, a violation of the Act, or any state securities or "Blue
Sky" laws or require registration pursuant thereto.
(b) The Transferee agrees that, in its capacity as a holder of
the Residual Certificates, it will assert no claim or interest in the
Contracts by reason of owning the Residual Certificates other than with
respect to amounts that may be properly and actually payable to the
Transferee pursuant to the terms of the Pooling and Servicing Agreement
and the Certificates.
(c) If applicable, the Transferee will comply with respect to
the Residual Certificates in all material respects with applicable
regulatory guidelines relating to the ownership of mortgage derivative
products.
(d) Upon notice thereof, the Transferee agrees to any future
amendment to the provisions of the Pooling and Servicing Agreement
relating to the transfer of the Residual Certificates (or any interest
therein) that counsel to the Company or the Trust may deem
__________
*These representations and covenants are to be deleted if the Residual
Securities are not Private Securities.
Exhibit 8 - Page 2
<PAGE>
necessary to ensure that any such transfer will not result in the imposition of
any tax on the Trust.
(e) The Transferee hereby agrees that the Servicer or an
affiliate thereof will (i) supervise or engage in any action necessary
or advisable to preserve the status of the REMIC as a REMIC, (ii) be,
and perform the functions of, the REMIC's tax matters person ("TMP"),
and (iii) employ on a reasonable basis counsel, accountants, and
professional assistance to aid in the preparation of tax returns or the
performance of the above.
(f) The Transferee hereby agrees to cooperate with the TMP and
to take any action required of it by the REMIC Provisions in order to
create or maintain the REMIC status of the REMIC.
(g) The Transferee hereby agrees that it will not take any
action that could endanger the REMIC status of any related REMIC or
result in the imposition of tax on any such REMIC unless counsel for,
or acceptable to, the TMP has provided an opinion that such action will
not result in the loss of such REMIC status or the imposition of such
tax, as applicable.
SECTION 4. ADDITIONAL TRANSFER RESTRICTIONS.
(a) No transfer of the Residual Certificates shall be made
unless the Servicer has consented in writing to such transfer. No
Residual Certificate may be transferred to a Disqualified Organization.
The Servicer will not consent to any proposed transfer (i) to any
investor that it knows is a Disqualified Organization or (ii) if the
transfer involves less than an entire interest in a Residual
Certificate unless (A) the interest transferred is an undivided
interest or (B) the transferor or the transferee provides the Servicer
with an Opinion of Counsel obtained at its own expense to the effect
that the transfer will not jeopardize the REMIC status of any related
REMIC. The Servicer's consent to any transfer is further conditioned
the Servicer's receipt from the proposed transferee of (x) a Residual
Transferee Agreement, (y) a Benefit Plan Affidavit, and (z) either (A)
if the transferee is a Non-U.S. Person, an affidavit of the proposed
transferee in substantially the form attached as Exhibit 8-A to Exhibit
8 to the Standard Terms and a certificate of the transferor stating
whether the Class R Certificate has "tax avoidance potential" as
defined in Treasury Regulations Section 1.860G-3(a)(2), or (B) if the
transferee is a U.S. Person, an affidavit in substantially the form
attached as Exhibit 8-B to Exhibit 8 to the Standard Terms. In
addition, if a proposed transfer involves a Private Certificate, (1)
the Servicer or the Trustee shall require that the transferor and
transferee certify as to the factual basis for the registration or
qualification exemption(s) relied upon to exempt the transfer from
registration under the Act and all applicable state securities or "blue
sky" laws, and (2) if the transfer is to be made within three years
after the acquisition thereof by a non-Affiliate of the Company from
the Company or an Affiliate of the Company, the Servicer or the Trustee
also may require an Opinion of Counsel that such transfer may be made
without registration or qualification under the Act and applicable
state securities laws, which Opinion of Counsel shall not be obtained
at the expense of the Company, the Trustee or the Servicer.
Notwithstanding the foregoing, no Opinion of Counsel shall be required
in connection with the initial transfer of the Residual Certificates or
their transfer by a broker or dealer, if such broker or dealer was the
initial transferee. Notwithstanding the fulfillment of the
prerequisites described above, the Servicer may withhold its consent
to, or the Trustee may refuse to recognize, a transfer of a Residual
Certificate, but only to the extent necessary to avoid a risk of
disqualification of a related REMIC as a REMIC or the imposition of a
tax upon any such REMIC. Any attempted transfer in violation of the
foregoing restrictions shall be null and void and shall not be
recognized by the Trustee.
Exhibit 8 - Page 3
<PAGE>
(b) If a tax or a reporting cost is borne by a related REMIC
as a result of the transfer of the Residual Certificates or any
beneficial interest therein, in violation of the restrictions
referenced herein, the Transferor shall pay such tax or cost and, if
such tax or costs are not so paid, the Trustee, upon notification from
the Servicer, shall pay such tax or reporting cost with amounts that
otherwise would have been paid to the transferee of such Residual
Certificates. In that event, neither the Transferee nor the transferor
shall have any right to seek repayment of such amounts from the
Company, the Servicer, the Trustee, the Trust, the REMIC or the holders
of any other Certificates, and none of such parties shall have
any liability for payment of any such tax or reporting cost. In the
event that a Residual Certificate is transferred to a Disqualified
Organization, the Servicer shall make, or cause to be made, available
the information necessary for the computation of the excise tax imposed
under section 860E(e) of the Code.
SECTION 5. ACKNOWLEDGMENTS.
(a) The Transferee acknowledges that, if the Residual
Certificates are Private Certificates, the Residual Certificates have
not been registered under the Act or registered or qualified under any
state securities laws and that no transfer may be made unless the
Purchased Certificates are registered under the Act and under
applicable state law or unless an exemption from such registration is
available. The Transferee further understands that neither the Company,
the Servicer nor the Trust is under any obligation to register the
Certificate or make an exemption from such registration available.
(b) The Transferee acknowledges that if any United States
federal income tax is due at the time a Non-U.S. Person transfers a
Residual Certificate, the Trustee or its designated Paying Agent or
other person who is liable to withhold federal income tax from a
distribution on a Residual Certificate under sections 1441 and 1442 of
the Code and the regulations thereunder (the "Withholding Agent") may
(i) withhold an amount equal to the taxes due upon disposition of the
Certificate from future distributions made with respect to the
Certificate to the transferee (after giving effect to the withholding
of taxes imposed on such transferee), and (ii) pay the withheld amount
to the Internal Revenue Service unless satisfactory written evidence of
payment of the taxes due by the transferor has been provided to the
Withholding Agent. Moreover, the Withholding Agent may (x) hold
distributions on a Certificate, without interest, pending determination
of amounts to be withheld, (y) withhold other amounts required to be
withheld pursuant to United States federal income tax law, if any, from
distributions that otherwise would be made to such transferee on each
Certificate it holds, and (z) pay to the Internal Revenue Service all
such amounts withheld.
(c) The Transferee acknowledges that the transfer of all or
part of the Residual Certificates that have "tax avoidance potential"
(as defined in Treasury Regulations section 1.860G-3(a)(2) or any
successor provision) to a Non-U.S. Person will be disregarded for all
federal income tax purposes.
(d) The Transferee acknowledges that the transfer of the
Residual Certificates to a U.S. Person will be disregarded for all
federal income tax purposes if a significant purpose of the transfer is
to impede the assessment or collection of the taxes and expenses
associated with the security within the meaning of Treasury regulation
section 1.860E-1(c)(1).
Exhibit 8 - Page 4
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused the Pooling and
Servicing Agreement be validly executed by its duly authorized representative as
of the day and year first above written.
--------------------------------------------
[Name of Transferee]
By: _________________________________________
Its: _________________________________________
Exhibit 8 - Page 5
<PAGE>
EXHIBIT 8-A
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
FOREIGN PERSON AFFIDAVIT
AND AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) and 860E(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: Deutsche Financial Capital Securitization LLC
Series __________ Trust (the "Trust")
Pass-Through Certificates, Class __
STATE OF ___________ )
) ss.:
COUNTY OF __________ )
Under penalties of perjury, I, the undersigned, declare that to the
best of my knowledge and belief, the following representations are true,
correct, and complete:
1. I am a duly authorized officer of ___________________ (the
"Transferee"), and on behalf of which I have the authority to make this
affidavit.
2. The Transferee is acquiring all or a portion of the securities (the
"Residual Certificates"), which represent a residual interest in one or more
real estate mortgage investment conduits (each, a "REMIC") for which elections
are to be made under Section 860D of the Internal Revenue Code of 1986, as
amended (the "Code").
3. The Transferee is a foreign person within the meaning of Treasury
Regulation Section 1.860G- 3(a)(1) (i.e., a person other than (i) a citizen or
resident of the United States, (ii) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, (iii) an estate that is subject to United States federal income tax
regardless of the source of its income), or (iv) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States fiduciaries has the authority to control
all substantial decisions of the trust who would be subject to United States
income tax withholding pursuant to Section 1441 or 1442 of the Code on income
derived from the Residual Certificates (a "Non-U.S. Person").
4. The Transferee agrees that it will not hold the Residual
Certificates in connection with a trade or business in the United States, and
the Transferee understands that it will be subject to United States federal
income tax under sections 871 and 881 of the Code in accordance with section
860G of the Code and any Treasury regulations issued thereunder on "excess
inclusions" that accrue with respect to the Residual Certificates during the
period the Transferee holds the Residual Certificates.
Exhibit 8-A - Page 1
<PAGE>
5. The Transferee understands that the federal income tax on excess
inclusions with respect to the Residual Certificates may be withheld in
accordance with section 860G(b) of the Code from distributions that otherwise
would be made to the Transferee on the Residual Certificates and, to the extent
that such tax has not been imposed previously, that such tax may be imposed at
the time of disposition of any such Residual Certificate pursuant to section
860G(b) of the Code.
6. The Transferee agrees (i) to file a timely United States federal
income tax return for the year in which disposition of a Residual Certificate it
holds occurs (or earlier if required by law) and will pay any United States
federal income tax due at that time and (ii) if any tax is due at that time, to
provide satisfactory written evidence of payment to the Trustee or its
designated paying agent or other person who is liable to withhold federal income
tax from a distribution on the Residual Certificates under sections 1441 and
1442 of the Code and the regulations thereunder (the "Withholding Agent").
7. The Transferee understands that, until such written notice is
provided, the Withholding Agent may (i) withhold an amount equal to the taxes
due upon disposition of a Residual Certificates from future distributions made
with respect to the Residual Certificate to subsequent transferees (after giving
effect to the withholding of taxes imposed on such subsequent transferees), and
(ii) pay the withheld amount to the Internal Revenue Service.
8. The Transferee understands that (i) the Withholding Agent may
withhold other amounts required to be withheld pursuant to United States federal
income tax law, if any, from distributions that otherwise would be made to such
transferee on each Residual Certificates it holds and (ii) the Withholding Agent
may pay to the Internal Revenue Service amounts withheld on behalf of any and
all former holders of each Residual Certificate held by the Transferee.
9. The Transferee understands that if it transfers a Residual
Certificate (or any interest therein) to a United States Person (including a
foreign person who is subject to net United States federal income taxation with
respect to such Residual Certificate), the Withholding Agent may disregard the
transfer for federal income tax purposes if the transfer would have the effect
of allowing the Transferee to avoid tax on accrued excess inclusions and may
continue to withhold tax from future distributions as though the Residual
Certificate were still held by the Transferee.
10. The Transferee understands that a transfer of a Residual
Certificate (or any interest therein) to a Non-U.S. Person (i.e., a foreign
person who is not subject to net United States federal income tax with respect
to such Residual Certificate) will not be recognized unless the Withholding
Agent has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same agreements and representations.
11. The Transferee understands that distributions on a Residual
Certificate may be delayed, without interest, pending determination of amounts
to be withheld.
12. The Transferee is not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural
Exhibit 8-A - Page 2
<PAGE>
telephone or electrical service cooperative described in Section 1381(a)(2)(C)
of the Code; or (iv) any other entity so designated by Treasury rulings or
regulations promulgated or otherwise in effect as of the date hereof. In
addition, a corporation will not be treated as an instrumentality of the United
States or of any state or political subdivision thereof if all of its activities
are subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
governmental unit.
13. The Transferee agrees to consent to any amendment of the Pooling
and Servicing Agreement that shall be deemed necessary by the Company (upon the
advice of counsel to the Company) to constitute a reasonable arrangement to
ensure that no interest in a Residual Certificate will be owned directly or
indirectly by a Disqualified Organization.
14. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
_______________, 19__, which incorporates by reference the Standard Terms
thereto (June 1997 Edition), among the Company, Oakwood Acceptance Corporation,
and ____________________, as Trustee.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
duly executed on its behalf, by its duly authorized officer as of the _______
day of _____________, 19__.
--------------------------------------------
[Name of Transferee]
By: ____________________________________________________
Its: ____________________________________________________
Personally appeared before me ___________________________, known or
proved to me to be the same person who executed the foregoing instrument and to
be a ______________________ of the Transferee, and acknowledged to me that he or
she executed the same as his or her free act and deed and as the free act and
deed of the Transferee.
Subscribed and sworn before me this ______ day of __________, 19__.
-------------------------------------------
Notary Public
My commission expires the _____ day of ________________, 19__.
Exhibit 8-A - Page 3
<PAGE>
EXHIBIT 8-B
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC
AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) and 860E(e)(4)
OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
Re: Deutsche Financial Capital Securitization LLC
Series ________ Trust (the "Trust")
Pass-Through Certificates, Class ___
STATE OF ___________________________ )
) ss.:
COUNTY OF _________________________ )
Under penalties of perjury, I, the undersigned declare that, to the
best of my knowledge and belief, the following representations are true, correct
and complete:
1. I am a duly authorized officer of ______________________ (the
"Transferee"), on behalf of which I have the authority to make this affidavit.
2. The Transferee is acquiring all or a portion of the securities (the
"Residual Certificates"), which represent a residual interest in one or more
real estate mortgage investment conduits (each, a "REMIC") for which elections
are to be made under Section 860D of the Internal Revenue Code of 1986, as
amended (the "Code").
3. The Transferee either is (i) a citizen or resident of the United
States, (ii) a domestic partnership or corporation, (iii) an estate that is
subject to United States federal income tax regardless of the source of its
income, (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States fiduciaries has the authority to control all substantial decisions of the
trust, or (v) a foreign person who would be subject to United States income
taxation on a net basis on income derived from the Residual Certificates (a
"U.S. Person").
4. The Transferee is a not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in ss. 1381(a)(2)(C) of the Code; or (iv) any other entity
so designated by Treasury rulings or regulations promulgated or otherwise in
effect as of the date hereof. In addition, a corporation will not be treated as
an instrumentality of the United States or of any
Exhibit 8-B - Page 1
<PAGE>
state or political subdivision thereof if all of its activities are subject to
tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such governmental unit.
5. The Transferee agrees to consent to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by the Issuer (upon advice of
counsel to the Issuer) to constitute a reasonable arrangement to ensure that no
interest in a Residual Certificate will be owned directly or indirectly by a
Disqualified Organization.
6. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
_______________, 19__, which incorporates by reference the Standard Terms
thereto (June 1997 Edition), among the Company, the Servicer, and
____________________, as Trustee.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
duly executed on its behalf by its duly authorized officer this ____ day of
______, 19__.
--------------------------------------------
[Name of Transferee]
By: _________________________________________
Its: ________________________________________
Personally appeared before me ___________________, known or proved to
me to be the same person who executed the foregoing instrument and to be a
_______________ of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this ____ day of ________, 19__.
------------------------------------------------
Notary Public
My commission expires the ____ day of ____________________, 19__.
Exhibit 8-B - Page 2
<PAGE>
EXHIBIT 9
FORM OF POWER OF ATTORNEY
Deutsche Financial Capital Limited Liability Company (the "Seller"),
pursuant to the Pooling and Servicing Agreement, dated as of
______________________, 19_____, among Deutsche Financial Capital Securitization
LLC (the "Company"), Oakwood Acceptance Corporation, and
_____________________________, as Trustee (the "Trustee"), which incorporates by
reference the Company's Standard Terms to Pooling and Servicing Agreement (June
1997 Edition) (the "Standard Terms"), hereby irrevocably constitutes and
appoints the Trustee its true and lawful attorney-in-fact and agent, to execute,
acknowledge, verify, swear to, deliver, record and file, in its name, place and
stead, assignments of Mortgages relating to Loan Secured Contracts from the
Seller to the Trustee as contemplated by Section 2.02 of the Standard Terms. If
required, the Seller shall execute and deliver to the Trustee, upon the
Trustee's request therefor, such further designations, powers of attorney or
other instruments as the Trustee may reasonably deem necessary for the purposes
hereof.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to them in the Agreement.
DEUTSCHE FINANCIAL CAPITAL LIMITED LIABILITY COMPANY
By: ____________________________________________________
Name: _________________________________________________
Title: __________________________________________________
Acknowledged and Agreed:
[Name of Trustee]
By: ____________________________________________________
Name: _________________________________________________
Title: __________________________________________________
Exhibit 9 - Page 1
<PAGE>
<PAGE>
===========================================
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC,
OAKWOOD ACCEPTANCE CORPORATION
AND
PNC BANK, NATIONAL ASSOCIATION
TRUSTEE
----------
SERIES 1997-I POOLING AND SERVICING AGREEMENT
DATED AS OF JUNE 1, 1997
----------
DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC,
SENIOR/SUBORDINATED
PASS-THROUGH CERTIFICATES, SERIES 1997-I
===========================================
S - 1
1997-I POOLING & SERVICING AGREEMENT
<PAGE>
THIS SERIES 1997-I POOLING AND SERVICING AGREEMENT, dated as of June 1,
1997, is made with respect to the formation of DFC Securitization Trust 1997-I
(the "Trust") among DEUTSCHE FINANCIAL CAPITAL SECURITIZATION LLC, a North
Carolina limited liability company (the "Company"), OAKWOOD ACCEPTANCE
CORPORATION, a North Carolina corporation (the "Servicer"), and PNC BANK,
NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee"), under this Agreement and the Standard Terms to Pooling and Servicing
Agreement, June 1997 Edition (the "Standard Terms"), all the provisions of which
are incorporated herein as modified hereby and shall be a part of this Agreement
as if set forth herein in full (this Agreement with the Standard Terms so
incorporated, the "Pooling and Servicing Agreement"). Capitalized terms used and
not otherwise defined herein shall have the respective meanings given them in
the Standard Terms.
PRELIMINARY STATEMENT
The Company has duly authorized the formation of the Trust to issue a
Series of Certificates with an aggregate initial principal amount of
$161,394,769, to be known as the Senior/Subordinated Pass-Through Certificates,
Series 1997-I (the "Certificates"). The Certificates consist of 11 Classes that
in the aggregate evidence the entire beneficial ownership interest in the Trust.
In accordance with Section 10.01 of the Standard Terms, the Trustee
will make an election to treat all of the assets of the Trust as two real estate
mortgage investment conduits (each, a "REMIC" and, individually, the "Pooling
REMIC" and the "Issuing REMIC") for federal income tax purposes. The Pooling
REMIC will consist of the Distribution Account and the Assets listed on the
Asset Schedule attached as Schedule I (as defined below) hereto. The Issuing
REMIC will consist of the nine Subaccounts designated as provided herein. The
"startup day" of each REMIC for purposes of the REMIC Provisions is the Closing
Date.
S - 2
1997-I POOLING & SERVICING AGREEMENT
<PAGE>
GRANTING CLAUSES
To provide for the distribution of the principal of and interest on the
Certificates in accordance with their terms, all of the sums distributable under
the Pooling and Servicing Agreement with respect to the Certificates and the
performance of the covenants contained in this Pooling and Servicing Agreement,
the Company hereby bargains, sells, conveys, assigns and transfers to the
Trustee, in trust and as provided in this Pooling and Servicing Agreement,
without recourse and for the exclusive benefit of the Holders of the
Certificates, all of the Company's right, title and interest in and to, and any
and all benefits accruing to the Company from, (a) the Contracts listed in
Schedule IA hereto and the Mortgage Loans (together with the Contracts, the
"Assets") listed in Schedule IB hereto (Schedule IA and Schedule IB shall be
collectively referred to herein as "Schedule I"), together with the related
Asset Documents, and all payments thereon and proceeds of the conversion,
voluntary or involuntary, of the foregoing, including, without limitation, all
rights to receive all principal and interest payments due on the Assets after
the Cut-off Date, including such scheduled payments received by the Company or
Seller on or prior to the Cut-off Date, and Principal Prepayments, Net Insurance
Proceeds, Net Liquidation Proceeds, Repurchase Prices and other unscheduled
collections received on the Assets on and after the Cut-off Date; (b) the
security interests in the Manufactured Homes, Mortgaged Properties and Real
Properties granted by the Obligors pursuant to the related Assets; (c) all
funds, other than investment earnings, relating to the Assets on deposit in the
Certificate Account or the Distribution Account for the Certificates and all
proceeds thereof, whether in the form of cash, instruments, securities or other
properties; (d) any and all rights, privileges and benefits accruing to the
Company under the Sales Agreement with respect to the Assets (provided that the
Company shall retain its rights to indemnification from the Seller under such
Sales Agreement, but also hereby conveys its rights to such indemnification to
the Trustee as its assignee), including the rights and remedies with respect to
the enforcement of any and all representations, warranties and covenants under
such Sales Agreement; and (e) proceeds of all the foregoing (including, but not
by way of limitation, all proceeds of any Standard Hazard Insurance Policy or
FHA Insurance, or any other insurance policy relating to any of the Assets, cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, rights to payment of any and every kind, and
other forms of obligations and receivables that at any time constitute all or
part or are included in the proceeds of any of the foregoing) to make
distributions on the Certificates as specified herein (the items referred to in
clauses (a) through (e) above shall be collectively referred to herein as the
"Trust Estate").
The Trustee acknowledges the foregoing, accepts the trusts hereunder in
accordance with the provisions hereof and the Standard Terms and agrees to
perform the duties herein or therein required to the best of its ability to the
end that the interests of the Holders of the Certificates may be adequately and
effectively protected.
SECTION 1. STANDARD TERMS.
The Company, the Servicer and the Trustee acknowledge that the Standard
Terms prescribe certain obligations of the Company, the Servicer and the Trustee
with respect to the Certificates. The Company, the Servicer and the Trustee
agree to observe and perform such prescribed duties, responsibilities and
obligations, and acknowledge that, except to the extent inconsistent with the
provisions of this Pooling and Servicing Agreement, the Standard Terms are and
shall be a part of this Pooling and Servicing Agreement to the same extent as if
set forth herein in full.
S - 3
1997-I POOLING & SERVICING AGREEMENT
<PAGE>
SECTION 2. DEFINED TERMS.
With respect to the Certificates and in addition to or in replacement
for the definitions set forth in Section 1.01 of the Standard Terms, the
following definitions shall be assigned to the defined terms set forth below:
"Accelerated Principal Distribution Amount": With
respect to any Distribution Date, the positive difference,
if any, between the Target Overcollateralization Amount and
the Current Overcollateralization Amount.
"Accrual Date": The Accrual Date shall be June 1, 1997.
"Adjusted Certificate Principal Balance": With respect to each Class of
Subordinated Certificates on any date of determination, its Certificate
Principal Balance immediately following the most recently preceding Distribution
Date reduced by all Writedown Amounts allocated to such Class on such
Distribution Date.
"Adjusted Subaccount Principal Balance": With respect to each of the
Corresponding Subaccounts relating to the Subordinated Certificates, on any date
of determination, its Subaccount Principal Balance immediately following the
most recently preceding Distribution Date reduced by all Writedown Amounts
allocated to such Subaccount on such Distribution Date.
"Average Sixty-Day Delinquency Ratio": With respect to any Distribution
Date, the arithmetic average of the Sixty-Day Delinquency Ratios for such
Distribution Date and the two preceding Distribution Dates. The "Sixty-Day
Delinquency Ratio" for a Distribution Date is the percentage derived from the
fraction, the numerator of which is the aggregate Scheduled Principal Balance
(as of the end of the preceding Prepayment Period) of all Assets (including
Assets in respect of which the related Manufactured Home, Real Property or
Mortgage Property has been repossessed or foreclosed upon but not yet disposed
of) as to which a Monthly Payment thereon is delinquent 60 days or more as of
the end of the related Collection Period, and the denominator of which is the
Pool Scheduled Principal Balance for such Distribution Date.
"Average Thirty-Day Delinquency Ratio": With respect to any
Distribution Date, the arithmetic average of the Thirty-Day Delinquency Ratios
for such Distribution Date and the two preceding Distribution Dates. The
"Thirty-Day Delinquency Ratio" for a Distribution Date is the percentage derived
from the fraction, the numerator of which is the aggregate Scheduled Principal
Balance (as of the end of the preceding Prepayment Period) of all Assets
(including Assets in respect of which the related Manufactured Home, Real
Property or Mortgage Property has been repossessed or foreclosed upon but not
yet disposed of) as to which a Monthly Payment thereon is delinquent 30 days or
more as of the end of the related Collection Period, and the denominator of
which is the Pool Scheduled Principal Balance for such Distribution Date.
"Book-Entry Certificates": The Class A, Class M
and Class B-1 Certificates.
"Carryover Interest Distribution Amount": With respect to each Class of
Certificates, except the Class X Certificates and the Residual Certificates, and
each Distribution Date, all amounts that were distributable on such Class as
Interest Distribution Amounts and as
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Carryover Interest Distribution Amounts on the previous Distribution Date
but not previously distributed, together with interest accrued on such amount at
the Pass-Through Rate in effect for such Class during the related Interest
Accrual Period. With respect to each Subaccount on each Distribution Date, all
amounts that were allocable to such Subaccount as Priority Interest Distribution
Amounts and as Carryover Interest Distribution Amounts on the previous
Distribution Date but not previously distributed, together with interest accrued
on any such amount at the Pass-Through Rate in effect for the Corresponding
Certificates with respect to such Subaccount during the related Interest Accrual
Period.
"Carryover Non-Priority Interest Distribution Amount": For any
Subaccount, on any Distribution Date, all amounts that were distributable on
such Subaccount as Non-Priority Interest Distribution Amounts on previous
Distribution Dates that remain unpaid.
"Carryover Writedown Interest Distribution Amount": With respect to
each Distribution Date and each related Class or Subaccount, all amounts that
were distributable on such Class or Subaccount as Writedown Interest
Distribution Amounts and Carryover Writedown Interest Distribution Amounts on
the previous Distribution Date but not previously distributed, plus interest
accrued on any such amount during the related Interest Accrual Period at the
then applicable Pass-Through Rate.
"Class A Certificates": The Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates and Class A-6 Certificates.
"Class A Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date and the denominator of
which is the sum of the Class A Certificate Principal Balance, the Class M
Adjusted Certificate Principal Balance, the Class B-1 Adjusted Certificate
Principal Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class A Principal Distribution Amount": For any Distribution Date,
will equal (i) prior to the Cross-over Date, the entire Principal Distribution
Amount, (ii) on any Distribution Date as to which the Principal Distribution
Tests are not met, the entire Principal Distribution Amount, or (iii) on any
other Distribution Date, the Class A Percentage of the Principal Distribution
Amount. For any Distribution Date, if the Class A Principal Distribution Amount
exceeds the Class A Certificate Principal Balance less the Principal
Distribution Shortfall Carryover Amount with respect to such Class and
Distribution Date, then such amounts shall be allocated to the Class M Principal
Distribution Amount.
"Class A Subaccounts": Any or all, as appropriate, of the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5 or Class A-6 Subaccounts.
"Class B Certificates": The Class B-1 Certificates and Class B-2
Certificates.
"Class B Subaccounts": Any or all, as appropriate, of the Class B-1 or
Class B-2 Subaccounts.
"Class B-1 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the
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Adjusted Certificate Principal Balance of the Class B-1 Certificates immediately
prior to such Distribution Date and the denominator of which is the sum of the
Class A Certificate Principal Balance, the Class M Adjusted Certificate
Principal Balance, the Class B-1 Adjusted Certificate Principal Balance and the
Class B-2 Adjusted Certificate Principal Balance, each immediately prior to such
Distribution Date.
"Class B-1 Principal Distribution Amount": For any
Distribution Date will equal (i) as long as the Class A Certificate Principal
Balance and the Class M Certificate Principal Balance have not been reduced to
zero and prior to the Cross-over Date, zero, (ii) on any Distribution Date as to
which the Principal Distribution Tests are not met and the Class A Certificate
Principal Balance and the Class M Certificate Principal Balance have not been
reduced to zero, zero, (iii) on any Distribution Date as to which the Principal
Distribution Tests are not met and the Class A Certificate Principal Balance and
the Class M Certificate Principal Balance each have been reduced to zero, the
Principal Distribution Amount, or (iv) on any other Distribution Date, the Class
B-1 Percentage of the Principal Distribution Amount. For any Distribution Date,
if the Class B-1 Principal Distribution Amount exceeds the Class B-1 Certificate
Principal Balance less the Principal Distribution Shortfall Carryover Amount
with respect to such Class and Distribution Date, then such amounts shall be
allocated to the Class B-2 Principal Distribution Amount.
"Class B-2 Floor Amount": With respect to any Distribution Date, either
(a) 1.95% of the aggregate principal balance of the Assets as of the Cut-off
Date, if the Class A Certificate Principal Balance, the Class M Certificate
Principal Balance and the Class B-1 Certificate Principal Balance have not been
reduced to zero immediately prior to such Distribution Date, and (b) zero, if
the Class A Certificate Principal Balance, the Class M Certificate Principal
Balance and the Class B-1 Certificate Principal Balance have been reduced to
zero immediately prior to such Distribution Date.
"Class B-2 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class B-2 Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of the Class A Certificate Principal Balance, the Class M Adjusted
Certificate Principal Balance, the Class B-1 Adjusted Certificate Principal
Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class B-2 Principal Distribution Amount": For any Distribution Date
will equal (i) as long as the Class A Certificate Principal Balance, the Class M
Certificate Principal Balance and the Class B-1 Certificate Principal Balance
have not been reduced to zero and prior to the Cross-over Date, zero, (ii) on
any Distribution Date as to which the Principal Distribution Tests are not met
and the Class A Certificate Principal Balance, the Class M Certificate Principal
Balance and the Class B-1 Certificate Principal Balance have not been reduced to
zero, zero, (iii) on any Distribution Date as to which the Principal
Distribution Tests are not met and the Class A Certificate Principal Balance,
the Class M Certificate Principal Balance and the Class B-1 Certificate
Principal Balance each have been reduced to zero, the Principal Distribution
Amount, or (iv) on any other Distribution Date, the Class B-2 Percentage of the
Principal Distribution Amount. If the Class A Certificate Principal Balance, the
Class M Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have not been reduced to zero on or before a Distribution Date, then
amounts otherwise allocable as Class B-2 Principal Distribution Amounts shall be
allocated first to the Class B-1 Principal Distribution Amount, next to the
Class M Principal Distribution
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Amount, and finally to the Class A Principal Distribution Amount, to the extent
that allocation of such amounts to the Class B-2 Principal Distribution Amount
would reduce the Class B-2 Certificate Principal Balance below the Class B-2
Floor Amount. On any Distribution Date, the Class B-2 Principal Distribution
Amount shall not exceed the Class B-2 Certificate Principal Balance less the
Principal Distribution Shortfall Carryover Amount with respect to such Class and
such Distribution Date.
"Class M Certificates": The Class M Certificates.
"Class M Percentage": With respect to any Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class M Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of the Class A Certificate Principal Balance, the Class M Adjusted
Certificate Principal Balance, the Class B-1 Adjusted Certificate Principal
Balance and the Class B-2 Adjusted Certificate Principal Balance, each
immediately prior to such Distribution Date.
"Class M Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A Certificate Principal Balance has not been
reduced to zero and prior to the Cross-over Date, zero, (ii) on any Distribution
Date as to which the Principal Distribution Tests are not met and the Class A
Certificate Principal Balance has not been reduced to zero, zero, (iii) on any
Distribution Date as to which the Principal Distribution Tests are not met and
the Class A Certificate Principal Balance has been reduced to zero, the
Principal Distribution Amount, or (iv) on any other Distribution Date, the Class
M Percentage of the Principal Distribution Amount. For any Distribution Date, if
the Class M Principal Distribution Amount exceeds the Class M Certificate
Principal Balance less the Principal Distribution Shortfall Carryover Amount
with respect to such Class and Distribution Date, then such amounts shall be
allocated to the Class B-1 Principal Distribution Amount.
"Class M Subaccount": The Class M Subaccount.
"Class R Certificates": The Class R Certificates, which comprise both
the Pooling REMIC Residual Interest and the Issuing REMIC Residual Interest.
"Class R-1 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 10(b) hereof, the Class R-1
Certificates, which will represent the Issuing REMIC Residual Interest.
"Class R-2 Certificates": Following the division of the Class R
Certificates into two separately transferable, certificated and fully registered
certificates in accordance with Section 10(b) hereof, the Class R-2
Certificates, which will represent the Pooling REMIC Residual Interest.
"Class X Carryover Strip Amount": With respect to the Class X
Certificates on each Distribution Date, all amounts that were distributable on
such Class as Class X Strip Amounts on previous Distribution Dates that remain
unpaid.
"Class X Certificates": The Class X Certificates
created pursuant to Section 3 hereof.
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"Class X Strip Amount": With respect to any Distribution Date, 30 days'
interest on the Subaccount Principal Balance of the Class A, Class B and Class M
Subaccounts, at a rate equal to the difference, if any, between the Weighted
Average Net Asset Rate and the weighted average of the Pass-Through Rates on the
Class A, Class M and Class B Subaccounts.
"Closing Date": June 27, 1997.
"Corporate Trust Office": The address set forth
hereinbelow under "Trustee".
"Corresponding Certificates": For any Subaccount,
the Class of Certificates bearing the same letter and
numerical designation as that borne by such Subaccount.
"Corresponding Subaccount" For any Class of Certificates, the
Subaccount bearing the same letter and numerical designation as that borne by
such Class.
"Cross-over Date": The later to occur of (a) the Distribution Date
occurring in January 2002 or (b) the first Distribution Date on which the
percentage equivalent of a fraction (which shall not be greater than 1) the
numerator of which is the aggregate Adjusted Certificate Principal Balance of
the Subordinated Certificates plus the Current Overcollateralization Amount for
such Distribution Date and the denominator of which is the Pool Scheduled
Principal Balance on such Distribution Date, equals or exceeds 1.75 times the
percentage equivalent of a fraction (which shall not be greater than 1) the
numerator of which is the initial aggregate Adjusted Certificate Principal
Balance of the Subordinated Certificates and the denominator of which is the
Pool Scheduled Principal Balance as of the Cut-off Date.
"Cumulative Realized Losses": With respect to any Distribution Date,
the aggregate Realized Losses incurred on the Assets during the period from the
Cut-off Date through the end of the related Prepayment Period.
"Current Overcollateralization Amount": As of any Distribution Date,
the positive difference, if any, between the Scheduled Principal Balance of the
Assets and the Certificate Principal Balance of all then outstanding Classes of
Certificates.
"Current Realized Loss Ratio": With respect to any Distribution Date,
the annualized percentage derived from the fraction, the numerator of which is
the sum of the aggregate Realized Losses for the three preceding Prepayment
Periods and the denominator of which is the arithmetic average of the Pool
Scheduled Principal Balances for such Distribution Date and the preceding two
Distribution Dates.
"Cut-off Date": June 1, 1997.
"ERISA Restricted Certificates": The Class M, Class B-1, Class B-2,
Class X and Class R Certificates.
"Institutional Holder": An insurance company whose long-term debt is
rated at least A-by a Rating Agency, or an equivalent rating from any other
nationally recognized statistical rating organization.
"Interest Distribution Amount": On each Distribution Date, an amount
equal to
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interest accrued at the applicable Pass-Through Rate for the related
Interest Accrual Period on (i) in the case of the Class A Certificates or the
Class A Subaccounts, the Certificate Principal Balance of such Class or the
Subaccount Principal Balance of such Subaccount, respectively, immediately prior
to that Distribution Date and (ii) in the case of the Subordinated Certificates
or the Corresponding Subaccounts, on the Adjusted Certificate Principal Balance
of such Class or the Subaccount Principal Balance of such Subaccount,
respectively, immediately prior to that Distribution Date.
"Issuing REMIC": The Trust REMIC consisting of the Subaccounts.
"Issuing REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Issuing REMIC.
"Non-Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the positive difference, if any, between
(i) the related Interest Distribution Amount for such Subaccount and (ii) the
related Priority Interest Distribution Amount for such Subaccount.
"Notional Principal Balance": The Notional Principal Balance of the
Class X Certificates on any date shall equal the sum of all of the Subaccount
Principal Balances on such date.
"Offered Subordinated Certificates": The Class M and Class B-1
Certificates.
"Overcollateralization Reduction Amount" : For any Distribution Date,
the positive difference, if any, between the Current Overcollateralization
Amount and the Target Overcollateralization Amount.
"Pass-Through Rate": With respect to each Class of Certificates (except
the Class X Certificates and the Residual Certificates) on any Distribution
Date, the per annum rate for such Class set forth in the table in Section 3
hereof. With respect to any Subaccount on any Distribution Date, the then
applicable Weighted Average Net Asset Rate.
"Pooling REMIC": The Trust REMIC consisting of the Assets and the
Distribution Account.
"Pooling REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Pooling REMIC.
"Principal Distribution Amount" On any Distribution Date other than the
Distribution Date that is the Termination Date, the sum of the following
amounts: (a) the sum of the principal components of all Monthly Payments
scheduled to be made on the Due Date occurring during the related Collection
Period on the related Assets that were Outstanding at the opening of business on
such Due Date (regardless of whether such Monthly Payments were received by the
Servicer from the related Obligors), not including any Monthly Payments due on
Liquidated Loans or repurchased Assets; (b) the sum of the amounts of all
Principal Prepayments received by the Servicer on the related Assets during the
related Prepayment Period; (c) with respect to any related Asset that became a
Liquidated Loan during the related Prepayment Period, the Scheduled Principal
Balance thereof on the date of liquidation thereof (determined without giving
effect to such liquidation); and (d) with respect to any related Asset that was
purchased or repurchased
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by the Servicer, the Seller or the Company pursuant to Section 2.06 of
the Standard Terms during the related Prepayment Period, the Scheduled Principal
Balance thereof on the date of purchase or repurchase thereof (determined
without giving effect to such purchase or repurchase); less (e) the
Overcollateralization Reduction Amount.
On the Distribution Date that is the Termination
Date, the Pool Scheduled Principal Balance for such
Distribution Date.
"Principal Distribution Shortfall Carryover Amount": With respect to
each Distribution Date and each Class of Certificates, an amount equal to all
Principal Distribution Amounts distributable on such Class from previous
Distribution Dates that have not yet been distributed on such Class of
Certificates. With respect to each Distribution Date and each Corresponding
Subaccount, an amount equal to all Principal Distribution Amounts distributable
on the Corresponding Certificates from previous Distribution Dates that have not
yet been distributed on such Corresponding Certificates.
"Principal Distribution Tests": With respect to each Distribution Date:
(a) the Average Sixty-Day Delinquency Ratio as of such Distribution Date does
not exceed 5%; (b) the Average Thirty-Day Delinquency Ratio as of such
Distribution Date does not exceed 7%; (c) the Cumulative Realized Losses as of
such Distribution Date do not exceed an amount equal to the percentage set forth
below of the initial aggregate Certificate Principal Balance of all the
Certificates:
Distribution Dates Percentage
January 2002 through June 2003 7%
July 2003 through June 2004 8%
July 2004 and after 9%
; and (d) the Current Realized Loss Ratio as of such Distribution Date does not
exceed 2.75%.
"Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the Interest Distribution Amount for the
Corresponding Certificates.
"Private Certificates": The Class B-2, Class X Certificates and
Residual Certificates.
"Qualified Bidders": Firms and institutions that are engaged in the
business of buying and selling manufactured housing paper.
"Rating Agency": Each of Fitch Investors Service, L.P. (One State
Street Plaza, New York, New York 10004, and Moody's Investors Service, Inc.
(99 Church Street, New York, New York 10004).
"Regular Certificates": The Class A Certificates, Class M Certificates,
Class B Certificates and Class X Certificates.
"Residual Certificates": The Class R Certificates or, following the
division of the Class R Certificates into two separately transferable,
certificated and fully registered certificates in accordance with Section 10(b)
hereof, the Class R-1 Certificates and Class R-2
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Certificates.
"Rule 144A Certificates": The Class B-2, Class X and Residual
Certificates.
"Servicing Fee Rate": 1.00% per annum.
"Subaccount": Each of the following nine subaccounts established solely
for purposes of the REMIC Provisions by the Trustee, which have the Pass-Through
Rates and initial Subaccount Principal Balances set forth below:
Initial
Pass-Through Subaccount
Subaccount Rate Principal Balance
A-1 (1) $34,713,000
A-2 (1) $25,021,000
A-3 (1) $19,982,000
A-4 (1) $ 7,105,000
A-5 (1) $20,813,000
A-6 (1) $19,867,000
M (1) $12,508,000
B-1 (1) $14,929,000
B-2 (1) $ 6,456,769
(1) The Pass-Through Rate on each Subaccount for any Distribution Date
shall be equal to the Weighted Average Net Asset Rate.
The final scheduled Distribution Date for each Subaccount is the
September 2027 Distribution Date. For purposes of Treasury Regulation
ss.1.860G-1(a)(4), the latest possible maturity date for each of the Subaccounts
shall be the September 2027 Distribution Date.
"Subaccount Principal Balance": With respect to each Subaccount, on
any date of determination, the amount identified as the "Initial Subaccount
Principal Balance" of such Subaccount in the definition of "Subaccount" above,
minus all amounts allocated to such Subaccount in reduction of its Subaccount
Principal Balance pursuant to Sections 5(a) and 7 hereof.
"Subordinated Certificates": The Class M, Class B-1, Class B-2,
Class X and Residual Certificates.
"Target Overcollateralization Amount": Shall mean (i) as of any date
of determination prior to the Cross-over Date, 1.25% of the Scheduled Principal
Balance as of the Cut-off Date, and (ii) on any other date of determination, the
lesser of (x) 1.25% of the Scheduled Principal Balance as of the Cut-off Date
and (y) 2.25% of the then outstanding Scheduled Principal Balance; PROVIDED,
HOWEVER, that in no event shall the Target Overcollateralization Amount be less
than 0.50% of the Scheduled Principal Balance as of the Cut-off Date.
"Trustee": PNC Bank, National Association, not in its individual
capacity but solely as Trustee under this Pooling and Servicing Agreement, or
any successor trustee appointed
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as herein provided. Notices to the Trustee shall be sent to Corporate Trust
Department, 1600 Market Street, 30th Floor, Philadelphia, Pennsylvania 19103,
Attn: DFC Securitization Trust 1997-I (the "Corporate Trust Office"), or its
successor in interest.
"Trust REMIC": Each of the Pooling REMIC and the Issuing REMIC.
"Underwriters": Credit Suisse First Boston Corporation (whose address
is 11 Madison Avenue, New York, New York 10010), and Deutsche Morgan Grenfell
Inc. (whose address is 31 West 52nd Street, 23rd Floor, New York, New York
10019).
"Weighted Average Net Asset Rate": With respect to any Distribution
Date, the weighted average of the Asset Rates applicable to the Monthly Payments
that were due during the related Collection Period on Assets that were
Outstanding at the beginning of the related Prepayment Period, less the
Servicing Fee Rate.
"Writedown Amount": With respect to each Distribution Date, the amount,
if any, by which (i) the aggregate Certificate Principal Balance of all the
Certificates, after all distributions have been made on the Certificates on such
Distribution Date pursuant to Section 5(b) hereof, exceeds (ii) the Pool
Scheduled Principal Balance of the Assets for the next Distribution Date.
"Writedown Interest Distribution Amount": With respect to each
Distribution Date and each Class of Subordinated Certificates, interest accrued
during the related Interest Accrual Period at the applicable Pass-Through Rate
on any related Writedown Amount. With respect to each Distribution Date and each
Corresponding Subaccount, interest accrued during the related Interest Accrual
Period on any related Writedown Amount at the Pass-Through Rate applicable to
the Corresponding Certificates.
SECTION 3. CERTIFICATES.
The aggregate initial principal amount of Certificates that may be
executed and delivered under this Pooling and Servicing Agreement is limited to
$161,394,769, except for Certificates executed and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Sections 5.04 or 5.07 of the Standard Terms. The Certificates shall be issued
in ten Classes having the designations, initial Certificate Principal Balances,
Pass-Through Rates and Final Scheduled Distribution Dates set forth or described
below:
INITIAL FINAL
CERTIFICATE SCHEDULED
PRINCIPAL PASS THROUGH DISTRIBUTION
DESIGNATION BALANCE RATE DATE(6)
A-1 $34,713,000 6.400% September 15, 2027
A-2 $25,021,000 6.550% September 15, 2027
A-3 $19,982,000 6.750% September 15, 2027
A-4 $ 7,105,000 6.900% September 15, 2027
A-5 $20,813,000 7.100% September 15, 2027
A-6 $19,867,000 7.375% September 15, 2027
M $12,508,000 (1) September 15, 2027
B-1 $14,929,000 (2) September 15, 2027
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B-2 $ 6,456,769 (3) September 15, 2027
X (4) (4) September 15, 2027
R (5) (5) September 15, 2027
(1) The Pass-Through Rate on the Class M Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.275% per annum
or (ii) the Weighted Average Net Asset Rate.
(2) The Pass-Through Rate on the Class B-1 Certificates for
any Distribution Date shall be equal to the lesser of (i) 7.525% per
annum or (ii) the Weighted Average Net Asset Rate.
(3) The Pass-Through Rate on the Class B-2 Certificates for
any Distribution Date shall be equal to the lesser of (i) 8.900% per
annum or (ii) the Weighted Average Net Asset Rate.
(4) The Class X Certificates shall have no Certificate
Principal Balance and no Pass-Through Rate. The Class X Certificates
will represent the right to receive, on each Distribution Date, the
applicable Class X Strip Amount and any Class X Carryover Strip Amount.
(5) The Class R Certificates shall have no Certificate
Principal Balance and no Pass-Through Rate, and shall represent the
residual interest in both the Pooling REMIC and the Issuing REMIC.
Following the division of the Class R Certificates into two separately
transferable, certificated and fully registered certificates in
accordance with Section 10(b) hereof, the Class R-1 and Class R-2
Certificates shall have no Certificate Principal Balances and no
Pass-Through Rates and shall represent the residual interest in the
Issuing REMIC and the Pooling REMIC, respectively.
(6) For purposes of Treasury Regulation ss.1.860G-1(a)(4), the
latest possible maturity date of each Class of Certificates shall be
the Final Scheduled Distribution Date.
SECTION 4. DENOMINATIONS.
The Book-Entry Certificates will be registered as one or more certificates
in the name of the Clearing Agency or its nominee. Beneficial interests in the
Book-Entry Certificates will be held by the Beneficial Owners through the
book-entry facilities of the Clearing Agency, in minimum denominations of
$25,000 and integral multiples of $1 in excess thereof.
The Class B-2 Certificate, the Class X Certificates and the Residual
Certificates will be issued in certificated, fully registered form. The Class
B-2 Certificates will be issued in minimum denominations of $100,000 and
integral multiples of $1,000 in excess thereof, except that one Certificate may
be issued in a different denomination that evidences the remainder of the
aggregate initial Certificate Principal Balance of such Class. The Class X
Certificates and the Residual Certificates will be issued in minimum Percentage
Interests equal to 10%.
SECTION 5. DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate the Available Distribution Amount to the
various Subaccounts, and, where applicable, the Servicer, to the extent of the
amount thereof remaining after application pursuant to clauses (1) through (4)
of Section 4.03 of the Standard Terms, in the following manner and in the
following order of priority:
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(i) First, concurrently, to each Class A Subaccount, (A)
first, its Priority Interest Distribution Amount for such Distribution
Date, with the Available Distribution Amount being allocated among the
Class A Subaccounts PRO RATA based on their respective Priority
Interest Distribution Amounts, and (B) second, the related Carryover
Interest Distribution Amount for such Distribution Date, if any, in
each case with the Available Distribution Amount being allocated among
the Class A Subaccounts PRO RATA based on their respective Carryover
Interest Distribution Amounts;
(ii) Second, to the Class M Subaccount, (A) first, the related
Priority Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(iii) Third, to the Class B-1 Subaccount, (A) first, the
related Priority Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Interest Distribution
Amount for such Distribution Date;
(iv) Fourth, to the Class B-2 Subaccount, (A) first, the
related Priority Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Interest Distribution
Amount for such Distribution Date;
(v) Fifth, concurrently, to each Class A Subaccount, the
related Principal Distribution Shortfall Carryover Amount for the Class
A Subaccounts, if any, for such Distribution Date, allocated among the
Class A Subaccounts pro rata based on the Certificate Principal
Balances of their respective Corresponding Certificates;
(vi) Sixth, to the Class A Subaccounts, the Class A Principal
Distribution Amount allocated sequentially to the Class A Certificates
in the order of their numerical designations in reduction of the
Subaccount Principal Balance of such Classes, until the Certificate
Principal Balance of each Class of Corresponding Certificates is
reduced to zero; PROVIDED, HOWEVER, that on any Distribution Date on
which the Pool Scheduled Principal Balance is less than the aggregate
Certificate Principal Balance of the Class A Certificates immediately
prior to such Distribution Date, the Class A Principal Distribution
Amount will be allocated among the Class A Subaccounts PRO RATA based
upon the Certificate Principal Balances of their respective
Corresponding Certificates;
(vii) Seventh, to the Class M Subaccount, (A) first, any
related Writedown Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Writedown Interest
Distribution Amount for such Distribution Date;
(viii) Eighth, to the Class M Subaccount, the related
Principal Distribution Shortfall Carryover Amount for the Class M
Subaccount, if any, for such Distribution Date;
(ix) Ninth, to the Class M Subaccount, the Class M Principal
Distribution Amount, in reduction of the Subaccount Principal Balance
of such Class, until it is reduced to zero;
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(x) Tenth, to the Class B-1 Subaccount, (A) first, any related
Writedown Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Writedown Interest Distribution
Amount for such Distribution Date;
(xi) Eleventh, to the Class B-1 Subaccount, the related
Principal Distribution Shortfall Carryover Amount for the Class B-1
Subaccount, if any, for such Distribution Date;
(xii) Twelfth, to the Class B-1 Subaccount, the Class B-1
Principal Distribution Amount, in reduction of the Subaccount Principal
Balance of such Class, until it is reduced to zero;
(xiii) Thirteenth, to the Class B-2 Subaccount, (A) first, any
related Writedown Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Writedown Interest
Distribution Amount for such Distribution Date;
(xiv) Fourteenth, to the Class B-2 Subaccount, the related
Principal Distribution Shortfall Carryover Amount for the Class B-2
Subaccount, if any, for such Distribution Date;
(xv) Fifteenth, to the Class B-2 Subaccount, the Class B-2
Principal Distribution Amount, in reduction of the Subaccount Principal
Balance of such Class, until it is reduced to zero;
(xvi) Sixteenth, if Oakwood Acceptance Corporation is the
Servicer, to the Servicer in the following sequential order: (A) the
Servicing Fee with respect to such Distribution Date; and (B) any
Servicing Fees from previous Distribution Dates remaining unpaid;
(xvii) Seventeenth, to each Subaccount, (i) first, its
Carryover Non-Priority Interest Distribution Amount for such
Distribution Date, (ii) second, its Non-Priority Interest Distribution
Amount for such Distribution Date, and (iii) its remaining Subaccount
Principal Balance in each case with the Available Distribution Amount
being allocated among the Subaccounts pro rata based upon the total
amount remaining to be paid with respect to each Subaccount under each
clause of this provision; and
(xviii) Finally, any remainder to Holders
of the Pooling REMIC Residual Interest.
(b) On each Distribution Date, after all Subaccount allocations have
been made as described in Section 5(a) above and Section 6 below, the Trustee
(or the Paying Agent on behalf of the Trustee) shall withdraw all amounts
allocated to the various Subaccounts, and shall distribute such amounts in the
following manner and in the following order of priority:
(i) First, concurrently, to each Class of Class A
Certificates, (A) first, its Interest Distribution Amount for such
Distribution Date, with the Available Distribution Amount being
allocated among such Classes PRO RATA based on their respective
Interest Distribution Amounts, and (B) second, the related Carryover
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Interest Distribution Amount, if any, for such Distribution Date, in
each case with the Available Distribution Amount being allocated among
the Classes of Class A Certificates PRO RATA based on their respective
Carryover Interest Distribution Amounts;
(ii) Second, to the Class M Certificates, (A) first, the
related Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(iii) Third, to the Class B-1 Certificates, (A) first, the
related Interest Distribution Amount for such Distribution Date, and
(B) second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(iv) Fourth, to the Class B-2 Certificates, (A) first, the
related Interest Distribution Amount for such Distribution Date and (B)
second, any related Carryover Interest Distribution Amount for such
Distribution Date;
(v) Fifth, concurrently, to each Class of Class A
Certificates, the related Principal Distribution Shortfall Carryover
Amount for the Class A Certificates, if any, for such Distribution
Date, allocated among the Class A Certificates pro rata based on their
respective Certificate Principal Balances;
(vi) Sixth, to the Class A Certificates, the Class A Principal
Distribution Amount allocated sequentially to the Class A Certificates
in the order of their numerical designations, in reduction of the
Certificate Principal Balance of such Classes, until reduced to zero;
PROVIDED, HOWEVER, that on any Distribution Date on which the Pool
Scheduled Principal Balance is less than the aggregate Certificate
Principal Balance of the Class A Certificates, immediately prior to
such Distribution Date, the Class A Principal Distribution Amount will
be allocated among the Class A Certificates PRO RATA based upon their
respective Certificate Principal Balances;
(vii) Seventh, to the Class M Certificates, (A) first, any
related Writedown Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Writedown Interest
Distribution Amount for such
Distribution Date;
(viii) Eighth, to the Class M Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class M
Certificates, if any, for such Distribution Date;
(ix) Ninth, to the Class M Certificates, the Class M Principal
Distribution Amount, in reduction of the Certificate Principal Balance
of such Class , until it is reduced to zero;
(x) Tenth, to the Class B-1 Certificates, (A) first, any
related Writedown Interest Distribution Amount for such Distribution
Date, and (B) second, any related Carryover Writedown Interest
Distribution Amount for such
Distribution Date;
(xi) Eleventh, to the Class B-1 Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class B-1
Certificates, if any, for such Distribution Date;
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1997-I POOLING & SERVICING AGREEMENT
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(xii) Twelfth, to the Class B-1 Certificates, the Class B-1
Principal Distribution Amount, in reduction of the Certificate
Principal Balance of such Class , until it is reduced to zero;
(xiii) Thirteenth, to the Class B-2 Certificates, (A) first,
any related Writedown Interest Distribution Amount for such
Distribution Date, and (B) second, any related Carryover Writedown
Interest Distribution Amount for such
Distribution Date;
(xiv) Fourteenth, to the Class B-2 Certificates, the related
Principal Distribution Shortfall Carryover Amount for the Class B-2
Certificates, if any, for such Distribution Date;
(xv) Fifteenth, to the Class B-2 Certificates, the Class B-2
Principal Distribution Amount, in reduction of the Certificate
Principal Balance of such Class , until it is reduced to zero;
(xvi) Sixteenth, to each Class of the Class A Certificates
sequentially in the order of their numerical designations, the
Accelerated Principal Distribution Amount for such Distribution Date,
in reduction of the Certificate Principal Balance of such Classes,
until reduced to zero;
(xvii) Seventeenth, to the Class X Certificates in the
following sequential order:
(A) the current Class X Strip Amount; and
(B) any Class X Carryover Strip Amount; and
(xviii) Finally, any remainder to the holders of the Issuing
REMIC Residual Interest.
(c) All distributions or allocations made with respect to each Class on
each Distribution Date shall be allocated PRO RATA among the outstanding
Certificates of such Class based on their respective Percentage Interests. So
long as the Book-Entry Certificates are registered in the name of a Clearing
Agency or its nominee, the Trustee shall make all distributions or allocations
on such Certificates by wire transfers of immediately available funds to the
Clearing Agency or its nominee. In the case of Certificates issued in
fully-registered, certificated form, payment shall be made either (i) by check
mailed to the address of each Certificateholder as it appears in the Certificate
Register on the Record Date immediately prior to such Distribution Date or (ii)
by wire transfer of immediately available funds to the account of a Holder at a
bank or other entity having appropriate facilities therefor, if such Holder
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and such Holder
is (A) with respect to any Class A or Class B Certificates issued after the
Closing Date in certificated, fully-registered form, the registered owner of
Class A or Class B Certificates with an aggregate initial Certificate Principal
Balance of at least $1,000,000, and (B) with respect to the Residual
Certificates or Class X Certificates, the registered owner of the Residual
Certificates or Class X Certificates evidencing an aggregate Percentage Interest
of at least 50%. The Trustee may charge any Holder its standard wire transfer
fee
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1997-I POOLING & SERVICING AGREEMENT
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for any payment made by wire transfer. Final distribution on the
Certificates will be made only upon surrender of the Certificates at the offices
of the Trustee set forth in the notice of such final distribution sent by the
Trustee to all Certificateholders pursuant to Section 9.01 of the Standard
Terms.
(d) (1) Any amounts remaining in the Distribution Account on any
Distribution Date after all allocations and distributions required to be made by
this Pooling and Servicing Agreement have been made, and any amounts remaining
in the Pooling REMIC after payment in full of all of the Regular Interests
therein and any administrative expenses associated with the Trust, will be
distributed to the Holders of the Pooling REMIC Residual Interest.
(2) Any amounts remaining in the Subaccounts on any Distribution Date
after all distributions required to be made by this Pooling and Servicing
Agreement have been made, and any amounts remaining in the Issuing REMIC after
payment in full of the Regular Interests therein and any administrative expenses
associated with the Trust, will be distributed to the Holders of the Issuing
REMIC Residual Interest.
SECTION 6. ALLOCATION OF WRITEDOWN AMOUNTS.
On each Distribution Date, after all required distributions have been
made on the Certificates pursuant to Section 5 above, the Writedown Amount, if
any, shall be allocated on such Distribution Date in the following manner and in
the following order of priority:
(a) First, to the Class B-2 Subaccount, to be applied in
reduction of the Adjusted Subaccount Principal Balance of such
Subaccount, until the Adjusted Subaccount Principal Balance has been
reduced to zero;
(b) Second, to the Class B-1 Subaccount, to be applied in
reduction of the Adjusted Subaccount Principal Balance of such
Subaccount, until the Adjusted Subaccount Principal Balance has been
reduced to zero; and
(c) Finally, to the Class M Subaccount, to be applied in
reduction of the Adjusted Subaccount Principal Balance of such
Subaccount, until the Adjusted Subaccount Principal Balance has been
reduced to zero.
(d) Writedown Amounts allocated to the Class B-2, Class B-1
and Class M Subaccounts pursuant to this Section 6 shall be allocated
to the Class B-2, Class B-1 and Class M Certificates, respectively,
until the Adjusted Certificate Principal Balance of each such Class has
been reduced to zero.
SECTION 7. REMITTANCE REPORTS.
(a) The Remittance Report for each Distribution Date shall identify the
following items, in addition to the items specified in Section 4.01 of the
Standard Terms:
(1) the Interest Distribution Amount for each Class of the
Certificates for such Distribution Date (which shall equal the Priority
Interest Distribution Amount for the Corresponding Subaccount) and the
Carryover Interest Distribution Amount,
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as well as any Writedown Interest Distribution Amount and any
Carryover Writedown Interest Distribution Amount, for each Class of
the Certificates for such Distribution Date, and the amount of
interest of each such category to be distributed on each such Class
based upon the Available Distribution Amount for such Distribution
Date;
(2) the amount to be distributed on such Distribution Date on
each Class of the Certificates to be applied to reduce the Certificate
Principal Balance of such Class (which will be equal to the amount to
be allocated on such Distribution Date on the Corresponding Subaccount
to be applied to reduce the Subaccount Principal Balance of such
Subaccount), separately identifying any portion of such amount
attributable to any prepayments, the amount to be distributed to reduce
the Principal Distribution Shortfall Carryover Amount on each such
Class based upon the Available Distribution Amount for such
Distribution Date and separately identifying any Accelerated Principal
Distribution Amount to be distributed on the Class A Certificates or
any Overcollateralization Reduction Amount;
(3) the aggregate amount, if any, to be distributed on
the Residual Certificates;
(4) the amount of any Writedown Amounts to be allocated to
reduce the Certificate Principal Balance of any Class of Subordinated
Certificates (which will be equal to the amount of any Writedown Amount
to be allocated to the Corresponding Subaccount) on such Distribution
Date;
(5) the Certificate Principal Balance of each Class of the
Certificates (which will be equal to the Subaccount Principal Balance
of the Corresponding Subaccount) and the Adjusted Certificate Principal
Balance of each Class of the Subordinated Certificates (which will be
equal to the Adjusted Subaccount Principal Balance of the Corresponding
Subaccount) after giving effect to the distributions to be made (and
any Writedown Amounts to be allocated) on such Distribution Date;
(6) the aggregate Interest Distribution Amount remaining
unpaid, if any, and the aggregate Carryover Interest Distribution
Amount remaining unpaid, if any, for each Class of Certificates (which
will be equal to the Priority Interest Distribution Amount and
Carryover Interest Distribution Amount remaining unpaid on the
Corresponding Subaccount), after giving effect to all distributions to
be made on such Distribution Date;
(7) the aggregate Writedown Interest Distribution Amount
remaining unpaid, if any, and the aggregate Carryover Writedown
Interest Distribution Amount remaining unpaid, if any, for each Class
of Certificates (which will be equal to such amounts remaining unpaid
on the Corresponding Subaccount), after giving effect to all
distributions to be made on such Distribution Date; and
(8) the aggregate Principal Distribution Shortfall Carryover
Amount remaining unpaid, if any, for each Class of Certificates, after
giving effect to the distributions to be made on such Distribution
Date.
In the case of information furnished pursuant to clauses (1), (2) and
(3) above, the amounts shall be expressed, with respect to any Class A, Class M
or Class B Certificate, as a
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1997-I POOLING & SERVICING AGREEMENT
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dollar amount per $1,000 denomination.
(b) In addition to mailing a copy of the related Remittance Report to
each Certificateholder on each Distribution Date in accordance with Section 4.01
of the Standard Terms, on each Distribution Date, the Trustee shall mail a copy
of the related Remittance Report to each Underwriter (to the attention of the
person, if any, reported to the Trustee by the applicable Underwriter), to the
Seller and to THE BLOOMBERG (to the address and to the person, if any specified
to the Trustee by Credit Suisse First Boston Corporation). The Trustee shall not
be obligated to mail any Remittance Report to THE BLOOMBERG unless and until
Credit Suisse First Boston Corporation shall have notified the Trustee in
writing of the name and address to which such reports are to be mailed, which
notice, once delivered, will be effective for all Distribution Dates after the
date such notice is received by the Trustee unless and until superseded by a
subsequent notice.
SECTION 8 LIMITED RIGHT OF SERVICER TO RETAIN SERVICING FEES FROM COLLECTIONS.
The Servicer may retain its Servicing Fee and any other servicing
compensation provided for herein and in the Standard Terms from gross interest
collections on the Assets prior to depositing such collections into the
Certificate Account; PROVIDED, HOWEVER, that Oakwood Acceptance Corporation as
Servicer may only so retain its Servicing Fee in respect of a Distribution Date
from gross interest collections on the Assets to the extent that the amounts on
deposit in the Certificate Account and attributable to the Available
Distribution Amount for such Distribution Date exceed the sum of all amounts to
be allocated and distributed on such Distribution Date pursuant to clauses (i)
through (xvi) under Section 5(b) hereof.
SECTION 9. REMIC ADMINISTRATION.
(a) For purposes of the REMIC Provisions, all of the Certificates
(except the Residual Certificates) will be designated as the "regular interests"
in the Issuing REMIC, the nine Subaccounts will be designated as the "regular
interests" in the Pooling REMIC, the Class R Certificates will be designated as
the "residual interest" in each of the Issuing REMIC and the Pooling REMIC and,
following the division of the Class R Certificates into two separately
transferable, certificated and fully registered certificates in accordance with
Section 10(b) below, the Class R-1 Certificates will be designated as the
"residual interest" in the Issuing REMIC and the Class R-2 Certificates will be
designated as the "residual interest" in the Pooling REMIC.
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(b) Upon the request of any registered Holder of a Class R Certificate,
the Trustee shall issue to such Holder two separately transferable, certificated
and fully registered Certificates (a Class R-1 Certificate and a Class R-2
Certificate), in substantially the forms of Exhibit R-1 and Exhibit R-2 attached
hereto. In the event that the Class R Certificates are exchanged for separately
transferrable Class R-1 and Class R-2 Certificates: (1) the Class R-1
Certificates will be designated as the residual interest in the Issuing REMIC,
(2) the Class R-2 Certificates will be designated as the residual interest in
the Pooling REMIC, (3) the Holders of a majority of the Percentage Interest in
the Class R-1 Certificates together with the Holders of a majority of the
Percentage Interest in the Class R-2 Certificates will have the option to make a
Terminating Purchase given to the Holders of a majority of the Percentage
Interest in the Residual Certificates pursuant to Section 9.01 of the Standard
Terms, and (4) the restrictions on the transfer of a Residual Certificate
provided in the Standard Terms will apply to both the Class R-1 and the Class
R-2 Certificates.
SECTION 10. AUCTION CALL.
(a) If neither the Servicer nor the Residual Majority exercises its
optional termination right as described in Section 9.01 of the Standard Terms
within 90 days after it first becomes entitled to do so, the Trustee shall use
commercially reasonable efforts to solicit bids for the purchase of all Assets,
REO Properties and Repo Properties remaining in the Trust from no fewer than two
prospective purchasers that it believes to be Qualified Bidders. If OAC is then
the Servicer of the Assets, the solicitation of bids shall be conditioned upon
the continuation of OAC as the servicer of the Assets on terms and conditions
substantially similar to those in the Pooling and Servicing Agreement, except
that it shall not be required to pay compensating interest or make Advances.
(b) If the Trustee receives bids from at least two Qualified Bidders
and the net proceeds of the highest bid are equal to or greater than the
Termination Price, the Trustee shall promptly advise the Servicer of the highest
bid and the terms of purchase, and the Servicer shall have three Business Days,
at its option, to match the terms of such bid. The Trustee shall thereafter sell
the Assets, REO Properties and Repo Properties either (i) to the Servicer, if it
shall so elect, or (ii) to the highest bidder, and in either case the Trustee
shall distribute the net proceeds of such sale in redemption of the Certificates
in compliance with Article IX of the Standard Terms and Section 5 hereof. Any
such sale must also comply with the requirements applicable to a Terminating
Purchase set forth in Section 9.02 of the Standard Terms.
(c) Any costs incurred by the Trustee in connection with such sale
(including without limitation any legal opinions or consents required by Section
9.02 of the Standard Terms) shall be deducted from the bid price of the Assets,
REO Properties and Repo Properties in determining the net proceeds therefrom.
(d) If the Trustee does not obtain bids from at least two Qualified
Bidders, or does not receive a bid such that the net proceeds therefrom would at
least equal the Termination Price, it shall not sell the Assets, REO Properties
and Repo Properties, and shall thereafter have no obligation to attempt to sell
same.
(e) The Servicer shall cooperate with and provide necessary information
to the Trustee in connection with any auction sale as described herein.
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SECTION 11. VOTING RIGHTS.
The Voting Rights applicable to the Certificates shall be allocated
0.5% to the Class R Certificates, 0.5% to the Class X Certificates and 99% to
the other Certificates in proportion with their respective Certificate Principal
Balance.
SECTION 12. GOVERNING LAW.
The Pooling and Servicing Agreement shall be construed in accordance
with and governed by the laws of the State of North Carolina applicable to
agreements made and to be performed therein. The parties hereto agree to submit
to the personal jurisdiction of all federal and state courts sitting in the
State of North Carolina and hereby irrevocably waive any objection to such
jurisdiction. In addition, the parties hereto hereby irrevocably waive any
objection that they may have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any federal or state
court sitting in the State of North Carolina, and further irrevocably waive any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
SECTION 13. FORMS OF CERTIFICATES.
Each of the Schedules and Exhibits attached hereto or referenced herein
are incorporated herein by reference as contemplated by the Standard Terms. Each
Class of Certificates shall be in substantially the related form attached
hereto, as set forth in the Index to Schedules and Exhibits attached hereto.
SECTION 14. COUNTERPARTS.
This Pooling and Servicing Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
SECTION 15. ENTIRE AGREEMENT.
This Pooling and Servicing Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, and fully
supersedes any prior or contemporaneous agreements relating to such subject
matter.
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IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have
caused this Pooling and Servicing Agreement to be duly executed by their
respective officers thereunto duly authorized and their respective signatures
duly attested all as of the day and year first above written.
DEUTSCHE FINANCIAL CAPITAL
SECURITIZATION LLC
BY: DEUTSCHE FINANCIAL CAPITAL
I CORP., as manager
By: /s/ Douglas R. Muir
Name: Douglas R. Muir
Title: Treasurer, Assistant
Secretary and Vice
President
OAKWOOD ACCEPTANCE CORPORATION
By: /s/ Douglas R. Muir
Name: Douglas R. Muir
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
AS TRUSTEE
By: /s/ Judy A. Wisniewski
Name: Judy A. Wisniewski
Title: Trust Officer
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STATE OF NORTH CAROLINA )
) s.
COUNTY OF DAVIDSON )
The foregoing instrument was acknowledged before me in the County of
Guilford this 24 day of June, 1997 by Douglas R. Muir, Treasurer, Assistant
Secretary and Vice President of Deutsche Financial Capital I Corp., a North
Carolina corporation, on behalf of the corporation, in its capacity as Manager
of Deutsche Financial Capital Securitization LLC.
/s/ Rebecca Waddell
-----------------------------------
Notary Public
My Commission expires: 3/4, 2002
STATE OF NORTH CAROLINA )
) s.
COUNTY OF DAVIDSON )
The foregoing instrument was acknowledged before me in the County of
Guilford this 24 day of June, 1997 by Douglas R. Muir, Vice President of
Oakwood Acceptance Corporation, a North Carolina corporation, on behalf of the
corporation.
/s/ Rebecca Waddell
-----------------------------------
Notary Public
My Commission expires: 3/4, 2002
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STATE OF Pennsylvania )
) s.
CITY OF Philadelphia )
The foregoing instrument was acknowledged before me in the City of
Philadelphia, this 27th day of June, 1997, by Judy Wisniewski, Trust Officer of
PNC Bank, a national banking association, on behalf of the association.
/s/ Joan F. Wilson
-----------------------------------
Notary Public
My Commission expires: 2/12, 2001
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INDEX TO SCHEDULES AND EXHIBITS
SCHEDULE IA Contract Schedule
SCHEDULE IB Mortgage Loan Schedule
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-2 Certificate
EXHIBIT A-3 Form of Class A-3 Certificate
EXHIBIT A-4 Form of Class A-4 Certificate
EXHIBIT A-5 Form of Class A-5 Certificate
EXHIBIT A-6 Form of Class A-6 Certificate
EXHIBIT M Form of Class M Certificate
EXHIBIT B-1 Form of Class B-1 Certificate
EXHIBIT B-2 Form of Class B-2 Certificate
EXHIBIT X Form of Class X Certificate
EXHIBIT R Form of Class R Certificate
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